Tales of the tech sector

Many icons risk being overthrown by the global financial crisis. Firms which once could be relied upon to make steady profits are now losing money and shedding jobs. The technology sector in particular has seen its fair share of doom and gloom as demand for electronics and computer products continue to decline, and Sony and Intel are the latest to tell their tales of woe. ┬á  For the financial year ending in March, Sony said it expected to make a net loss of $1.7 billion, making it the companyÔÇÖs first annual loss in 14 years. ┬á The electronics giant had forecast as recently as October that it would make a profit for this year, but its fortunes have changed as the global downturn hit home. The company also blamed a strong yen for making its exports more expensive. 80 percent of SonyÔÇÖs sales come from overseas, and with the yen at a 13-and-a-half-year high against the dollar, the companyÔÇÖs foreign earnings have been severely eroded.┬á The company plans to cut 16,000 full and part-time jobs from the electronics side of the company and to shut unprofitable parts of its consumer electronics operations. Its Playstation division will remain in order to save face, and the company will continue marketing its miniature computer known as the Vaio P.┬á Chipmaker Intel is also closing five of its plants in the US and Asia to cope with falling computer sales, resulting in the loss of between 5,000 and 6,000 jobs. The two factories to close, one in Santa Clara, California and the other in Silicon Valley, were based on older microchip technology. The firm said it is being affected by the growth in popularity of super-small laptops such as the Vaio P, as they use lower profit margin and smaller and slower chips.┬á  Other electronics firms are also suffering. South Korea's LG Electronics, which makes handsets and home appliances, reported on Thursday a net loss of $490 million for the last three months of 2008, its first loss in almost two years. ┬áThe gloom in the technology sector is not all-encompassing, however, since Apple announced on Wednesday a record quarterly profit of $1.61 billion in the final three months of last year thanks to the sale of more than 22 million iPods and more than four million iPhones.┬á  "It was a great quarter and better than most people expected," said Yair Reiner, analyst at Oppenheimer. ┬á "Even in these economically challenging times, we are incredibly pleased to report our best quarterly revenue and earnings in Apple history - surpassing the $10bn in quarterly revenue for the first time ever," said Apple boss Steve Jobs.