Other technology companies are still struggling, especially given it’s unclear if they can tackle the shifts.
Intel Corp.’s results exemplify the benefits and perils of the switch to mobile and Internet-based cloud services. Earlier this month, the Santa Clara, California-based company reported third-quarter revenue and profit that was little changed from a year earlier and its fourth-quarter revenue forecast fell short of some analysts’ predictions.
While Intel has less than 1% share in smartphone processors, the company still benefits from their popularity because it supplies the main component in nine out of every 10 of the server machines that supply them with data and services.
IBM, the largest computer-services provider, said Oct. 16 that sales fell for the sixth straight quarter amid weak demand for its servers and other computer hardware. Companies are turning to software and services delivered over the Internet instead of buying from IBM.
Symantec, whose security software is used on many PCs, dropped the most in four years last week after its forecast fell short of analysts’ estimates. The company is struggling to adapt its business model to a marketplace that’s shifting to mobile and to specialized anti-hacking technologies for corporations, said Daniel Ives, an analyst at FBR Capital Markets & Co.
“We have a bit of a hole to dig out of here,” said Symantec CEO Steve Bennett.
The shift to mobile devices from traditional desktop computers also is disrupting Internet companies that rely on promotions. The mobile-ad market is projected to expand 89% this year compared with 13% for the total market, according to EMarketer Inc.
While Google and Facebook are benefiting from marketers trying to reach people on their mobile phones, Yahoo hasn’t fared as well. It forecast fourth-quarter revenue excluding sales passed on to partners that may fall short of analysts’ expectations.
Online retailer EBay Inc. wasn’t immune either. The world’s largest online marketplace reported sales and profit forecasts that missed analysts estimates as online shopping on its site slowed.
“These are forces that are fundamentally changing the market,” said Baker of Gartner.