Rob Black's Tech Stock Report

Includes: HPQ, IBM, MSFT, NOK, SNE
by: Rob Black
Microsoft (NASDAQ:MSFT) CEO Steve Ballmer says No. 1 software maker, under pressure to stay competitive, will boost next year's research and development budget by $1.3 billion to around $7.5 billion.

IBM (NYSE:IBM) set a positive tone for the software sector heading into earnings. We saw continued strength in enterprise spending which should be favorable for companies like BEA Systems, Oracle, and Citrix, which all have a high concentration of financial services and telco customers.

Hewlett-Packard (NYSE:HPQ) helped by sales gains in Europe and emerging markets, reclaimed the title of world's biggest personal-computer maker after trailing behind Dell for three years. Hewlett-Packard's market share increased 1.2 percentage points to 16.3 percent worldwide while Dell’s slid to 16.1 percent on its slowest growth ever.

In the past Sony (NYSE:SNE) prevailed in the game wars over Microsoft as consoles judged largely on their power and graphics, and a big library of games. But as Sony prepares to introduce its PlayStation 3, the battlefield is expanding and analyzing these companies has a new twist. Sony must now compete with the XBOX 360 while also holding its own in Internet-based gaming which is Microsoft's sweet spot.

Sony has an uphill battle but they will contend that the PlayStation 3’s powerful hardware makes it the best investment, even at a higher price. The PlayStation 3’s base price will be $499, compared with $299 for the Xbox 360. To blunt Sony’s advantage in computer horsepower, Microsoft has been making the case that the network is the difference. Since it introduced the Xbox 360, Microsoft has been promoting Xbox Live, a $50-a-year networking service that lets users play together in casual games or enter tournaments.

Nokia (NYSE:NOK), the world's largest maker of mobile phones, said profit fell as sales of cheap handsets in China and India eroded margins. The stock declined the most in more than a year after earnings missed analysts' estimates.

Comment on this Article