8 Tech Companies That Had It All And Lost It
Far To Fall
Whether it's mobility, networking or traditional desktop PCs, the tech industry moves pretty quickly. So quickly, in fact, that it can be easy for even the biggest tech giants to fall behind, losing market share and risking being nothing more than a chapter in high-tech history.
Over the past 10 years, tech companies big and small have tasted the sweetness of success, only to have it stolen away by some of their biggest competitors. Here is a recap of some the tech industry's most notable -- and most heart-wrenching -- declines.
For a closer look at how RIM let the mobile device market slip through its hands, see a preview of our exclusive report, An Inside Look At Where RIM Went So Wrong. The full article is available exclusively on the CRN Tech News app, available now in the Apple App Store.
Research In Motion (RIM)
RIM's BlackBerry was once the clear-cut leader in the smartphone market, grasping nearly 43 percent of the U.S. mobile market in 2010.
But as the consumerization of IT trend started sweeping the IT world, Android-based devices and the Apple iPhone started to eat the BlackBerry's lunch, whisking away more and more of its traditional enterprise users.
As a result, RIM's share of the market has taken a nosedive, and that 43 percent figure from 2010 has shrunk to just 11 percent, according to market analyst comScore. RIM reported in June a loss of $518 million for its fiscal first quarter and said it sold 7.8 million BlackBerry smartphones, a hefty drop from the 11.1 million it sold during the previous quarter. What's more, the company has revealed a string of layoffs set to continue throughout the end of 2013 to save on operational costs, and has on-boarded analysts from J.P. Morgan to start evaluating its financial options.
Kodak
Eastman Kodak, a long-standing American icon in the film and photography market, filed for bankruptcy in January 2012 after struggling for years to compete in the digital age.
The 131-year-old company pioneered the photography market, with its Kodachrome color film, on store shelves for a whopping 74 years before it was finally retired by the Rochester, N.Y.-based company in 2009. Kodak attempted to offset lackluster film sales by rolling out digital imaging and even inkjet printers in the years leading up to its fall, but never managed to gain the foothold it needed to compete.
As a result, the company's finances eventually ran dry, and it hasn't reported a full-year profit since 2004. Kodak said in January that it has about $5.1 billion in assets and nearly $6.8 billion in debt. Tech titans Apple and Google are attempting to buy Kodak's portfolio of nearly 1,100 imaging patents, a purchase that could run them up to $2.6 billion.
Palm
Before the age of smartphones, PDAs ruled and Palm, the maker of the iconic Palm Pilot device, led the pack. According to comScore, as recently as 2009 Palm held 8.3 percent of the U.S. subscriber market, beating out one of today's reigning champs, Google.
But as Google's Android OS became more mature, and the iPhone started to steal more of Palm's traditional customer base, Palm started to lose its grip on the market. What's more, a lukewarm response to its Pre and Pixi smartphones weren't enough to mount the comeback it needed. By the start of 2010, Palm's share of the U.S. market slipped to 5.7 percent.
But before Palm's tough times grew tougher, Hewlett-Packard stepped in and purchased the company for $1.2 billion in April 2010, gaining access to Palm's portfolio and mobile software webOS. Though the software has managed to maintain a solid reputation among the developer community, HP's webOS team has been dwindling steadily for the past several months.
AltaVista
Google, by a long shot, dominates the online search market today. But before the Mountain View, Calif.-based company stole the search engine show, many users' first choice was AltaVista.
First launched in 1995, the now-defunct AltaVista is nestled between Yahoo and Ask Jeeves in the search engine historical time line. With quick response times (for the late '90s, that is) and a number of unique features such as its online translation tool Babel Fish, AltaVista became one of the most popular search engines of its time.
But with the arrival of Google in 1998, it became hard for AltaVista to stay relevant, and it was eventually bought by Yahoo in 2003. Though Yahoo ran the site for nearly seven years, it finally shut it down in 2010, explaining that it was simply underperforming compared to other Yahoo-owned sites.
Gateway
In the early- and mid-90s, Gateway and its iconic cow-spotted packaging were taking the PC market by storm. Similar to Apple, the Irvine, Calif.-based company primarily targeted the consumer market, establishing hundreds of retail stores by 2001.
But starting that year, an overall weak global economy, coupled with pressure from competitors such as Dell, caused Gateway to lose its momentum. Between 2001 and 2002, the company's stock price fell nearly 70 percent, causing Moody's Investors Service and Standard & Poor's to lower its credit to junk bond status. On March 28, 2002, the fallen PC giant said it was closing 27, or about 10 percent, of its retail locations.
But before things went from bad to worse, Gateway was acquired by fellow PC maker Acer for approximately $710 million in October 2007.
Nokia
In January 2008, handset maker Nokia captured a record 40 percent of the global cellphone market, with its profits skyrocketing 44 percent to $2.7 billion on booming sales in China, Africa and the Middle East.
But with the advent of smartphones such as the iPhone, the success of the Finnish company soon started to fizzle. While its feature phones still sell in emerging markets today, Nokia's smartphones, which were originally based on its homegrown Symbian OS, lacked the robust app ecosystems that have made iOS and Android so popular. And, even after transitioning its phones from Symbian to Windows Phone 7, Nokia's worldwide market share has been slashed in half, dropping to 22 percent as of April.
Meanwhile, Nokia's Lumia smartphones, which were predicted by some analysts to spark a comeback, haven't managed to recapture any of that lost share -- at least not yet. In June, Nokia said it plans to cut 10,000 jobs by the end of 2013, and in July it reported a second-quarter operating loss of $1 billion.
Nortel
Nortel, one of the earliest pioneers of the modern telecom market, manufactured much of the equipment used today to support wireless communications. A bulk of the world's current telephone and Internet networks, in fact, are based around some type of telecom solution previously churned out by the Montreal-based company.
But the 2008 economic downfall, along with increased competition from rivals such as Cisco, eventually led to Nortel's decline, and the fallen tech giant filed for bankruptcy protection in 2009. Nortel also began selling off major business units piece by piece, including the sale of its former enterprise unit to Avaya for $915 million.
Nortel's patent portfolio became one of the most sought-after in tech history once it went up for grabs. In July 2011, the company sold its nearly 6,000 patents to a consortium made up of Apple, Microsoft, EMC, Research In Motion, Sony and Ericsson for $4.5 billion in cash.
Nintendo
Nintendo dominated the gaming console market in the '80s, '90s and even early 2000s, with a massive fan base that couldn't get enough of its "Super Mario Brothers" series of games. But with the rise of competing consoles such as Microsoft's Xbox and Sony's PlayStation, some of that fan base started to jump ship, viewing Nintendo more as an old-school gaming antique than a cutting-edge system.
Even with the launch of Wii, Nintendo's wireless, motion-detecting console, the Japanese gaming giant can't seem to regain the industry-leading position it enjoyed in its golden days. In April, Nintendo posted an annual loss of more than $530 million, the first-ever annual loss in its history.
In July, the company's woes continued. Nintendo reported a quarterly loss of $220 million, and said it sold only 710,000 Wii consoles, a figure that is down significantly compared to the 1.6 million it shipped during the same period last year. Its recently launched Nintendo 3DS handheld device has also been met with mixed reviews.