Want Some Fries with Those Chips?

Article Details

Global Watchtower

Common Sense Advisory Blogs

Posted by Donald A. DePalma on January 17, 2006 in the following blogs: Translation and Localization, Web Globalization, Business Globalization, Technology, Interpreting, Market Data, Global Marketing, Best Practices, Supplier Business Issues
Pages \| \|

With 2005 just a few weeks behind us, some of the world's largest businesses began issuing their Q4-05 earnings reports. Several caught our attention yesterday:

According to Intel's CFO, "2005 was a great year punctuated by a difficult December." Competition from AMD likely led to a slight loss of market share, but each quarter point of share in the chip industry costs dearly. Bigger problems resulted from Intel's global footprint: Revenue in APAC was flat from the third quarter, and both Americas had a down quarter.
IBM's profit grew 13% in the 4th quarter on a 12% decrease in sales. Services account for half its sales, but both local and foreign competition is tough.
Yahoo saw its profit rise 80% in the last quarter, but didn't meet financial analyst expectations. The company cautioned analysts to expect slower revenue growth and reduced margins in the coming year. In 2005 Yahoo sold its Chinese operation to Alibaba, a company in which it still holds a stake.
McDonald's said that it expected its Q4 earnings to come in better than analysts pedicted, due to an unexpected 4.6% increase in same-store sales in Germany, France, and Russia.

Fast food outpaces fast chips. Technology is still finding its way back from the brink, as we predicted in our September 2004 report on Lionbridge. Throttled back IT spending and ever-dropping hardware prices conspired to make it tougher for technology companies to increase sales, so profitability comes from increased efficiency, higher productivity, and deferred investment. All those factors should make language service providers increase their search for new non-IT markets, while practitioners in hardware and software localization may want to sharpen their pencils as they figure out how to do more with less.

Categories