Hardware firms begin to struggle

July proved to be a distressing month for those in the hardware sector, with even some of the largest global firms revealing sharp falls in their profitability.

News of reduced profit expectations at Japanese electronics giants Nintendo and Sony were particularly surprising, as the past six months have seen the two engage in a fraught battle for handheld gaming console supremacy. Both firms have launched new systems globally this year – and Nintendo in particular admits that its woes stem from a combination of launch costs and falling demand for its older platforms.

Sony, meanwhile, saw profits slump 69 per cent (to around £37 million) during the three months to June on account of slowing sales across many of its product lines.
There was disappointment in the UK too as Granville Technology – operator of the Time and Tiny brands and the UK’s biggest PC manufacturer – called in the administrators and axed 1,500 jobs. Prior to the move the company is reported to have been losing between £1 million and £2 million a month. Falling levels of consumer spending and increasing competition amongst computer retailers are thought to be to blame for the company’s problems. Administrator Grant Thornton has been charged with the salvage work.