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Euro woes force Asia hardware makers into biz rethink

The deepening Eurozone crisis has left tech companies, particularly Asia's hardware vendors, vulnerable to market fluctuations and lower consumer demand, forcing them to relook their business strategies and diversifying to growth sectors just as energy and mobile devices.

The euro is rapidly losing its currency value

"The euro is rapidly losing its currency value. Samsung Electronics is currently being run by scenario-based management as the eurozone is one of its biggest markets,’’ said Rhee In-yong, a communications officer at Samsung, in the report.

Hardware makers most vulnerable Samsung will not be the only Asian hardware maker to suffer from the current economic climate. Leong pointed out Europe is a significant market for the region's hardware products, and he expects demand for PCs and ultrabooks, as so then as networking gear, to slow as IT departments and household budgets in Europe are cut furthermore.

He said manufacturers are as well holding less inventory than usual, in case a systemic shock materializes. Sellers of leading edge or new concept consumer products will be less impacted even though, and this group includes the likes of Apple and Samsung as so then as makers of Windows 8-equipped PCs, he added.

Rethinking business plans Asked if it would make sense for Asian companies to move their base from China to Europe to alleviate currency costs, Milroy said since Europe is more expensive than most Asian locations for manufacturing, this is not a viable option.

Downturn just as tablets

"Companies need to focus on markets where there is growth in a downturn just as tablets, smartphones, and cloud computing," the Frost & Sullivan analyst recommended. Panasonic said it implemented various measures to cope with the declining business conditions just as diversification. In particular, it has been looking for new business segments to develop just as energy, it revealed. Similarly, embattled Japanese firm Sony has started to look at non-core segments more closely such as in medical devices.

Ryan fondly remembers growing up using floppy disks and game cartridges, and remains fascinated with technological research. At an early age, it dawned on him how geeky he was when he realized how much he enjoyed window shopping at computer malls. Ryan has been in TV, radio and print journalism covering a range of news spanning finance, politics, sports and research. He loves caption contests and as well leisurely strolls along supermarket aisles. He secretly dreams of owning his own video arcade.

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More information: Zdnet