This was clearly the year of information technology (IT). We saw the launch of a dazzling array of devices. Tech users were on tenterhooks as a patents war between Apple and Samsung led to uncertainty, Microsoft took a plunge and entered the hardware segment, while Google managed to show the world how a high-end smartphone could be economical, too.
And, 2013 seems action-packed for the sector, with the role of leaders at the helm of some companies certain to dictate trends. We will talk about five chief executives in the technology space, who would be scrutinised for each move they make.
Apple, the company grabbing the most headlines in 2012, will continue to do so next year. For Timothy Cook, the 52-year-old chief executive officer (CEO), it was a crucial year, having just succeeded Steve Jobs after the latter’s death. For Cook, among the four runners-up to Time magazine’s annual “Person of the year” designation, the highlight was when Apple’s stock hit an all-time high of $700 a share, up from $300 when Jobs died in October 2011 (it has since come down). Importantly, Cook successfully launched the iPhone5 and iPad Mini. Within three days of launch, Apple sold five million iPhone5 sets. And, in the case of the iPad Mini, within three days of its launch, three million had been sold.
Already, all this is so last year. Cook has a more formidable task ahead. This includes the growing acceptance of Android smartphones, Samsung finally overtaking Apple, and Microsoft taking baby steps towards a collaborated computing environment. Critics say neither the iPhone5 or the iPad Mini brought forth any new innovation.
With Apple projected to have won 230 million iPhone users by the end of the year, customer growth will start to ebb because it is approaching saturation point, Andy Hargreaves, an analyst at Pacific Crest Securities, told Bloomberg News. In 2013 the device war will get stronger and Cook might have to battle with Google, which in 2012 launched the Nexus tablet and Nexus 4 smartphone. Both got great reviews and also proved a high-end smartphone could be competitively priced.
Cook cannot afford another fiasco as Apple’s Map navigation. He will also have to keep an eye on Microsoft. This was the year when Steve Ballmer, CEO, said Microsoft was a device and services company. From his annual letter to shareholders, it appears he’s clear that hardware is going to be Microsoft’s future.
Hence the biggest news of 2012, the launch of Windows 8, will play into 2013 as well. It’s too early to write off Windows 8, based on the dismal sales performance during the holiday season and its inability to perk personal computer sales. A lot hinges in Microsoft on Windows 8’s success; it would make Microsoft stay relevant in the shift towards mobile devices.
In 2013, Ballmer should focus on the Windows 8-based Surface RT, the first personal computer Microsoft itself produces and sells, and its pricing, and try to get some place in the fast-growing tablet market. How he does it and how the software giant stays relevant in a falling PC market will be tracked. The race seems to get tougher in the enterprise segment, Microsoft’s playground for years, with falling PC sales and bring-your-own-device getting mainstream.
Hewlett-Packard (HP) is one company which needs to come out of the choppy water it has been sailing in for some years. A yet-again writeoff of $8 billion has put CEO Meg Whitman’s effort to bring stability to the company in the limelight. This year saw the company write off almost $16 billion — $8 billion on the acquisition of EDS in 2008 and $8.8 billion on the acquisition of Autonomy. And, it is still grappling with the merger of its PC and printer division. She has already said the turnaround would take four to five years.
Whitman will have to take tough decisions if HP is to regain glory in the PC market, which it lost to Chinese manufacturer Lenovo. Year 2013 will also see HP getting into the tablet market.
Analysts say HP’s woes can be positive for Indian IT services companies. Closer home, two CEO’s would be watched for their strategy on bringing out their firms from restructuring struggles, S D Shibulal, CEO of Infosys and T K Kurien at the helm of Wipro’s IT business. Especially with the news that 2013 would be a better year on IT budgets, the Street is expecting both CEOs to give some good news.
Both companies have lost to peers which have managed to report double-digit growth despite a difficult macro environment. In 2012, Infosys not only lost its bellwether position but stopped issuing quarterly forecasts, for the first time. As the year comes to an end, it said it might be unable to manage even five per cent growth for FY13.
Year 2012 saw Shibulal taking some bold steps. Though small, they go against what the company has said so far. One is an expressed change in pricing. If it comes about, the top management is preparing to come off the high-margin strategy. Shibulal also announced the acquisition of Lodestone, while also saying the word ‘conservative’ should be removed from Infosys.
Kurien had focused on client mining and it seems to work. Wipro has managed to increase the count of its $100-million clients from one to nine. It has also chosen to tread the inorganic route by acquiring in select areas such as analytics and oil & gas. But Kurien will need to focus on deal volumes. As with Infosys, though the company has won deals, the numbers are not reflected in its revenue. Kurien will complete two years at the helm in February. The first year was all about getting the company into shape, which meant several exits. Many are hoping 2013 (FY2014) will be about getting business and winning big-ticket deals.
As Kurien himself told Business Standard in an interview: “We have laid out a strategy and are now in execution mode. What we are doing today is in line with the target we had set for ourselves four quarters earlier. I am neither excited nor depressed over our performance this quarter. For me, the most important concern is whether our strategy is playing out. I would be depressed only when we fail to execute our strategy.” We shall wait to see the results.