Grim Reaper Ready To Pounce In 2011

The new year is not going to be kind to many high tech suppliers. Slow growth and intense competition will force many vendors to either be acquired or close up shop, according to market research firm In-Stat.Jim McGregor, In-Stat's Chief Technology Strategist, expects only modest growth in IT spending for a couple of reasons. First, few, new, high growth markets are emerging. Also in 2010, companies increased spending to make up for severe cuts made the previous year. This double whammy will force many struggling suppliers to exit the marketplace.

Smartphones is one area where the number of suppliers may shrink. Only a few mobile OSs will gain sufficient market share to remain viable going forward, which may be bad news for Samsung's bada, Microsoft's Phone 7, and Palm's WebOS. McGregor also thinks that the window of opportunity is closing on WiMAX technology, which does not bode well for Clearwire. In addition as carriers move to LTE networks, the number of equipment vendors will shrink, a trend already taking shape with Intel gobbling up Infineon's wireless group and Broadcom acquiring Beceem.

The changes will create a couple of ripple effects for small and medium businesses. As the market consolidates, management of their network devices may become easier as different systems are combined. On the downside, some product lines may killed off as suppliers find themselves with overlapping systems. Consequently, corporations could wind up with devices that may not to be able to grow and support their future needs.