Friday, July 27, 2012

Dark Clouds Over Europe's High-Tech Firms

As if European high-tech executives don't have enough global competitive pressures on their minds, they must now add to their litany of woes: slowing local demand for their products in almost all market segments. Government spending has been reduced in response to debts and other fiscal issues, while consumers are reluctant to spend due to high unemployment rates and rising fears about the general economy.
For many of the continent's bellwether electronics, high-tech, and industrial entities, international sales continue to account for 50 percent or more of annual sales, with Europe often contributing about one quarter, as in the case of Siemens AG (NYSE: SI; Frankfurt: SIE). However, Europe remains a major market for companies like Koninklijke Philips Electronics N.V. ,STMicroelectronics NV (NYSE: STM), and Siemens. The continued weakness of the region's economy and fears about the strength of the euro are worrying issues for executives at these companies, as EBN blogger Jennifer Baljko writes in her latest contribution:Earnings: Dark Clouds Hang Over Europe's Bellwethers.
Regional economic turbulence like that raging in Europe is on the minds of high-tech executives globally. The impact of Europe's fiscal problems has been felt even by Apple Inc. (Nasdaq: AAPL) and many other US-based electronics manufacturers, software vendors, and component manufacturers. But Europe isn't the only region battling demand slowdown. China is resilient but barely so, and in the United States, persistently high unemployment is dampening consumer demand. We'll continue to monitor, report about, and comment upon this unfolding issue.

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