Seeking Alpha

Tech giants feel impact of U.S. spying scandal

  • Cisco's (CSCO) FQ1 results earlier this week highlight how major tech firms are feeling the impact of a backlash in China to Edward Snowden's revelations about U.S. spying.
  • "All the big U.S. IT companies are concerned," says Jim Lewis, a China and technology expert at the Center for Strategic Studies in Washington.
  • Cisco has been the most explicit about attributing the Snowden effect to its falling sales in China; Beijing could be specifically targeting the company due to American hostility to telecom-equipment makers Huawei Technologies and ZTE (ZTCOY) over fears that their products could be used for espionage.
  • However, Juniper's (JNPR) experience is that the "The Snowden effect is not real," adding that business in China continues to grow.
  • Other companies to suffer in the country recently include IBM (IBM) and Microsoft (MSFT), with the reasons cited including macro-economic factors. IBM might be somewhat inured to the NSA affair, as some of its high-end products face less competition than Cisco's offerings.
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Comments (5)
  • vandal6
    , contributor
    Comments (18) | Send Message
     
    Edward Norton's spying revelations!!

     

    What will that do to his film career?!

     

    "Snowden" perhaps?
    15 Nov 2013, 04:45 AM Reply Like
  • monkey see
    , contributor
    Comments (622) | Send Message
     
    Maybe Snowden will star in his own tv show:"Leave It To Eddie".
    15 Nov 2013, 05:03 AM Reply Like
  • stoj
    , contributor
    Comments (438) | Send Message
     
    in reality, Huawei is cheaper with similar quality to Cisco, and was "blocked" in the US long before the "Snowden effect" which actually doesn't exist, because everyone already knew that governments use "big data" to extend spying ( the ones who didn't know, are not company leaders, but media leeches and blind followers )
    15 Nov 2013, 06:55 AM Reply Like
  • Yokyok
    , contributor
    Comments (330) | Send Message
     
    Maybe they just don't like cisco
    15 Nov 2013, 11:35 AM Reply Like
  • Jason Aycock
    , contributor
    Comments (123) | Send Message
     
    Whoops, we were clearly a bit distracted by the cinema in the first bullet; we've changed it to "Snowden" to match the other bullets so it should all make sense now ...

     

    --Jason
    Managing Editor, Market Currents
    15 Nov 2013, 05:10 PM Reply Like
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