Wednesday, January 27, 2010

Financials, Entertainment Show Electronics Future Is Bright

I started 2010 by looking at my investments, as I prepared material for the upcoming tax season. It has been a rocky year, with last December’s investments at the bottom of the chart, then slowly rising back up. The global economy has followed this same market path in coming out of the worst recession in decades — slowly — and those who held in with good, diverse investments are gradually seeing rewards.

Looking at individual stocks in the electronics sector, companies are reporting encouraging quarterly results. Intel recently declared quarterly cash dividend of 15.5 cents per share on the company’s common stock, reflecting the previously announced 12.5% increase from the fourth quarter of 2009. Intel's fourth-quarter net income was at $2.3 billion, up 875%. Rival AMD reported fourth quarter and annual results in January 2010 as well, announcing revenue for the fourth quarter of 2009 of $1.646 billion, an increase of 18% compared to the previous quarter and 42% compared to the fourth quarter of 2008. AMD has transitioned to a fabless business model and has reached an antitrust settlement with Intel, both of which affected the bottom line.

There are markets that I expected to see grow quickly, such as the E-book reader — the ultimate Christmas gift this year. According to the Boston-based Yankee Group, the E-book reader market will spark $2.5 billion in revenue by 2013. This segment is still catching fire.

I never noticed much when nieces and nephews started going to 3D movies, thinking that it was just an expensive new way to hook children on a new trend. Now that I’ve seen Avatar, it’s easy to understand that this area can affect other areas. 3D movie technology is making its way into the home, opening up 3D TV for consumers, demonstrated this year at the Consumer Electronics Show (CES). 3D cameras are now being actively field-tested for use in TV production.

The only problem I had with Avatar was that the movie plot seemed to imply that technology development represents “the bad guys.” Since Avatar uses state-of-the art electronics for computer-generated 3D images, yet condemns technology as a threat to the environment, the theme is a bit contradictory.

Electronics manufacturers are very aware preserving nature, generally through materials restrictions on the industry. From lead-free solder to the elimination of halogenated materials, to using less of raw materials (the Occam process is one example), the electronics industry has certainly become one that is more compatible with the natural world.

Because of Avatar’s award-winning popularity, other 3D movies and 3D TV will certainly be contributing to the health of our economy.

Gail Flower, editor at large

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