Industry News

2013 – The Top 10 Tech News Stories

google-glassA look back at some of the top tech news stories that made the headlines in 2013.

1. NSA Spying

Former government contractor Edward Snowden’s revelations about government spying, appearing in news stories starting in June, brought together geopolitics and the world of technology. Though the revelations sparked a lot of “I told you so” talk, documents provided by Snowden helped confirm that the U.S. National Security Agency and Federal Bureau of Investigation have for years been conducting massive surveillance of American citizens, foreigners living in the country and foreign government leaders. Though details are still secret, it is clear that the FBI and NSA monitor an unlimited amount of phone records from telecom companies, emails, and other Internet communications and services facilitated by the big tech companies. Critics say aspects of the surveillance, such as the bulk collection of citizens’ communications, are unconstitutional. The revelations have prompted the European Union to question its “safe harbor” data privacy agreement with the U.S. They have also caused foreign governments to be wary of buying U.S. technology. Meanwhile Russia has granted Snowden asylum, and there is no end in sight to the debate over government’s prying into private communications.

2. Steve Ballmer, CEO of Microsoft Retires

Steve Ballmer’s announcement in August that he would be leaving Microsoft after more than three decades was an industry milestone but did not come as a shock. Ballmer, who will depart within 12 months of the announcement, took over as CEO from Bill Gates in 2000, leading Microsoft as revenue increased from $22.9 billion to $78 billion. Known industry-wide for his booming voice and manic exhortations at Microsoft meetings, Ballmer broadened the company’s product portfolio beyond Windows and Office by, among other efforts, building up its data center, Xbox and search businesses. But Ballmer, a math-whiz Harvard classmate of Gates hired as the company’s first business manager, operated under increasingly intense criticism for missing out on the mobile revolution and being outflanked by Steve Jobs as Apple soared in the consumer market with the iPod, iPhone and iPad. Microsoft’s languishing share price is a sign that investors lack confidence in the company’s ability to innovate under a baby boomer associated with the PC era. It will be up to Microsoft’s next CEO to lead the company’s transformation into a devices and services business, and ensure that its bold but controversial $7.2 billion acquisition of Nokia, announced shortly after Ballmer’s resignation, is successful.

3. Blackberry’s Continued Decline

Diehard BlackBerry fans thought the company had a chance for survival when in January then-CEO Thorsten Heins debuted the touchscreen BlackBerry Z10 and a handset with a physical keyboard, the BlackBerry Q10. Both devices were designed around the BlackBerry 10 platform. The company had replaced co-CEOs Jim Balsillie and Mike Lazaridis a year earlier, after losing ground to Apple and Android devices that offered sleeker interfaces and bigger app stores. But the BlackBerry 10 phones were too little, too late. For its August quarter, the company reported a $965 million net operating loss. Then, the company announced it would cut 4,500 workers and go private in a $4.7 billion sale to Fairfax Financial Holdings. But Fairfax could not get financing for the deal, and in November the company appointed ex-Sybase CEO John Chen as chairman and interim CEO and accepted a $1 billion loan from a consortium led by Fairfax. On December 20th however BlackBerry released another grim earnings report, posting $4.4 billion in losses and a 56 percent drop in revenue for its fiscal third quarter.

4. Bitcoin sparks a gold rush

Bitcoin was at once one of the most hyped and bewildering technology-related phenomena of the year. The most popular of the so-called “crypto currencies,” Bitcoin is a peer-to-peer payment system devised in 2009 by a developer using the name Satoshi Nakamoto. It uses open-source cryptographic algorithms to enable transactions and create units of digital currency called bitcoins. Bitcoins are created or “mined” as computers on the network solve mathematical problems used to verify transactions. As speculators and tech faddists fueled the buzz, bitcoins skyrocketed in value from under $20 at the beginning of the year to $1,200 by December. Transactions are processed free or for low fees, and because no personal information is exchanged, are anonymous and touted as more secure than credit cards. In early December the French central bank issued a warning about Bitcoin volatility and a China central bank ban against banks dealing in bitcoins caused the giant search engine Baidu to stop taking them as payment. The value of bitcoins plunged by more than $500 over the next 48 hours. Bitcoin’s volatility presents risks that it may remain just a niche payment system for the Web and a vehicle for speculators.

5. Dell becomes a private company

When Dell announced in February that the company planned to go private, founder Michael Dell said the move was necessary to turn around the company’s flagging fortunes. Fierce competition in the PC market had curbed profit for years, and the idea was that free of the scrutiny of Wall Street, the company would have the breathing room to better execute its strategy to focus on high-margin products and services and refresh its push into the midmarket. But first, so-called “activist investor” Carl Icahn swooped in and scooped up shares, insisting that Dell’s offer of $13.65 per share was too low and that Michael Dell should be ousted. What followed was a nasty public battle to win over shareholders. After several shareholder vote postponements, Michael Dell prevailed by sweetening his offer to a total of $13.88 per share, or about $25 billion overall. While competition against the likes of Hewlett-Packard and Lenovo won’t get easier, the company that Michael Dell founded three decades ago in his college dorm has a new lease on life.

6. TWITTER IPO

Twitter’s November initial pubic offering was three bellwethers in one: a coming of age for the microblogging site; another milestone in the rise of social networking as a major force in contemporary culture; and a signal that a hot stock market was igniting the tech IPO market once again. After setting an IPO price of $26, Twitter shares shot up to $50.09 on its IPO day before closing at $44.90. The share price gives Twitter a $24.5 billion market capitalization, not bad for a company with no profit. Investors are banking on the company’s ability to use the cash infusion from the IPO to build up its infrastructure and invest in mobile and video technologies. Twitter is just the marquee name on a roster of other tech companies that have gone public lately, riding a stock market that has fueled a 25 percent rise for share prices of Nasdaq tech companies so far this year. But the big question for Twitter is how it will be able to best monetize its millions of users.

7. Wearable Tech

In 2013 we saw the rise of wearable tech beginning to permeate the market and although it is still very early for much of this technology it appears to be a growing trend which will see more products in the new year and beyond. The trendiest of the wearable tech is without a doubt Google Glass which is available by invite only to early adopters who had to shell out $1,500 to get “Explorer” versions of the devices, essentially optical, head-mounted display computers that users can control with voice commands. Despite privacy complaints related to the device it remains popular among the first adopters, expect a new lower cost more commercial version to be released next year. Other wearable tech such as smart watches are now establishing a market for themselves with Samsung, Sony and Qualcomm debuting models, Apple has also long been rumored to be working on an iWatch which may appear in the new year.

8. Yahoo buys Tumblr

Yahoo’s $1.1 billion deal to buy social networking and microblogging site Tumblr was not the biggest tech acquisition of the year but it marked the boldest move that Marissa Mayer has yet taken to reinvent the company. Yahoo’s success as an Internet portal in the ’90s has been overshadowed by competitors, including Facebook and Google. The 38-year-old Mayer, a star at Google, was hired as Yahoo CEO in 2012. Her predecessor, Scott Thompson, had taken the reins from founder Jerry Yang but lasted just four months before resigning amid controversy over a false claim about his college degree in a regulatory filing. The combination of Mayer’s youth, programming chops, reportedly imperial management style, and all-American blond looks has fascinated industry watchers, and a jump in the company’s share price during her tenure thus far has given her something of a honeymoon period. Mayer herself, though, has acknowledged that the stock has been lifted by investments made years ago, which include a stake in Chinese Web giant Ali Baba. Meanwhile, revenue and profit shrank for Yahoo itself in the quarter ending in September. At some point, the company needs to show that Mayer’s strategy of expanding content such as news while boosting the company’s tech infrastructure is paying off.

9. The HealthCare.gov debacle

While industry experts say that many if not most big IT projects have major problems, the fumbled Oct. 1 rollout of HealthCare.gov has the dubious distinction of casting a shadow on U.S. President Barack Obama’s landmark legislative achievement: the Affordable Care Act, often called Obamacare. Thirty-four states chose to be part of the HealthCare.gov marketplace. The $630 million website, built to let millions of Americans shop for heath care, was able to sign up a paltry six people on its first day of service, 248 in the first two days and just 27,000 people in the first month. Outages, incorrect data loading and security concerns plagued the site. The problems appear to stem from lack of overall project oversight, insufficient testing, and glitches in the system’s ability to link to multiple government databases. On its Dec. 1 self-imposed deadline for fixing the problems, the government reported that since mid-October, tech workers had made more than 400 bug fixes and software improvements to the site. However, remaining kinks include multiple-hour queues to get into the system.

10. Next Generation Gaming Consoles

Waiting two years for a new smartphone can be so tortuous for some techies that carriers this year started offering early upgrade programs. But gamers have been much more patient, playing on systems that haven’t seen a major refresh since the mid-2000s. That changed this year, however, with the November launch of the Microsoft Xbox One and Sony PlayStation 4. Both companies slowly leaked details about their new consoles throughout the year, and that slow burn seems to have done the trick. When the consoles hit store shelves, consumers snapped up millions of them in just a few days. It’s still too close to tell who is winning the console wars, though the PS4 appears to have a small lead.


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