The Best and Worst Technology Companies of 2006: A Report Card

by James R. Stoup May 19, 2006

I have come across several authors recently who have been speculating on the health and long-term viability of many prominent “tech” companies. Unfortunately they only examined things in the very short term which doesn’t give the best picture of how a company might actually be doing. So, here is a list I have compiled that describes how several major companies are performing in today’s market.

Trail blazers—A ~ Apple, Google
Anytime you hear about awards for best design, coolest interface or most innovative offering these two names consistently come up. Their stock is on the rise, and profits are consistenly up, because these two companies are constanly creating things that people want. They don’t try to be everything to everyone, nor do they waste energy on projects unrelated to their core goals. Thus we can look to Apple and Google to be the trend setters for quite some time.

Innovators—A- ~ Intel, Samsung, IBM
These are the three biggest innovators where hardware is concerned. Other companies might take their designs and improve them but these three are the ones constantly pushing the boundries of what is possible. Intel is looking to put dozens of cores on each processor, IBM is working on a quantum processor and Samsung is miniaturizing electronic components we never thought possible.

Successful followers—B+ ~ ebay, Amazon, Yahoo, AMD
Ebay, Amazon, Yahoo and AMD are great companies that are very stable, but not too innovative. Yahoo tends to add certain services only after Google tries it first. AMD produces some of the best chips today, but has no dynamic plan for tommorrow. Ebay and Amazon have almost reached the point where they can’t really add anything new because they have maxed out their business model. So like I said before, these companies are steady performers, but don’t expect too much change from them in the future.

Holding their own—B- ~ HP, Motorola, Sony
Here are three companies who are still in the fight, but things could go either way. HP is beginning to recover from the Carly Fiona disaster and recently began to innovate again. Motorola has done a good bit of steady business in its corner of the market by impressing everyone with its Razor phone. Meanwhile Sony seems to be the most adrift of these three but still doing well inspite of a lack of direction. Each of these companies is profitable, and won’t go anywhere soon, but they also seem to lack the drive and direction that will ensure long-term success.

Slowly dying—C ~ Microsoft, Dell, Creative
If it weren’t for its Xbox division I would say that everything at Microsoft is going downhill. Don’t worry, Microsoft won’t be shutting down anytime soon (its enormous resources will keep it afloat for a decade easy) but it isn’t really doing anything too positive either. Not counting the Xbox (which is rather impressive) every other department in Redmond seems to be just running in place without really getting anywhere. The company’s OS is a nightmare, MSN is getting killed by Google and Yahoo, Office hasn’t changed in a meaningful way in over a decade and nothing else it is producing seems to have any plan behind it (Origami anyone?). Microsoft is slowly and surely killing itself with its incompetent leadership. Thus given enough time even its resources will run out. This is quite unlike Dell, which is doing a wonderful job in its chosen field but failing horribly at everything else (Dell DJ ring a bell?). Dell is in trouble because it doesn’t have anymore room to grow in the computer hardware business. It has reached the point where if Dell wants to grow anymore it will have to expand outside of its core competency. Sadly this is something it just doesn’t know how to do. Meanwhile Creative has resoundingly failed at making a portable music player. Thankfully they also sell other products or else they would be out of business. Ideally they would pick off the pieces, exit the portable music business completely, and start over in something else. However, given the fact that its CEO is crazy, I don’t see this happening. Creative will hang on for a while but its death is only a matter of time.

Dead but doesn’t know it yet—D ~ Sun, Napster
I like Sun, I really do. I like Solaris, it is a very powerful OS. However right now Sun is selling something that most of the market just doesn’t want. It has a quality product, it just isn’t what is needed right now. Maybe under new leadership things will change for the better, but realistically I don’t think Sun will even exist in 10 years. Maybe sooner if someone buys them out. [Note to Microsoft, if you are looking for a stable OS on the cheap Solaris might be for you] Then there is Napster. What can I say that hasn’t been said a hundred times before? Its service sucks, its DRM is insane and it is easier to use iTunes. Napster (and all of its clones like Urge) are doomed to fail and I can’t even think of an “unless this happened . . .” kind of best case scenario that might save it. The end is here, just wait and see.


  • I agree in general, but I disagree on eBay, Amazon and Yahoo. I would expect some very interesting plays from them in markets you would not traditionally expect them to be in.

    Amazon: with their web API based alexa, mturk and maybe their killer app, S3 (and similar stuff).

    eBay: with Skype, bigger ecommerce plays and auctions for realworld things (like TV advertising).

    and Yahoo: with the social internet. Since buying Flickr and, they suddenly have a great opportunity to help people help them organize the world’s information.

    Devanshu Mehta had this to say on May 19, 2006 Posts: 108
  • The Xbox is impressive? In what way? Technically? Maybe. But it isn’t all that impressive in sales. MS, despite the slow moving by Sony on the PS3, is still a very distant second in the console wars, and may have new pressure from Nintendo despite the lame name of their product.

    I’ve read one estimate that has 6-8 million 360 consoles shipped by the time the PS3 rolls out this fall. The high price of the PS3 may give some pause, but I’m willing to bet that Sony has close to that number by the time Xmas is over.

    MS banked on Halo to drive their console. It did. But they also banked on raking in the developers. That did not happen. Xbox, both the original and the 360, are dismal failures in Japan, the country where a lot of game development is done or at least headquartered.

    Impressive? Can’t agree with you there at all. The Xbox is further indication of MS problems, in fact: Proof that they don’t have a clue about how to win a market segment, despite given the opportunity to do so. MS is too arrogant and clueless with regard to the consumer space to succeed.

    mightymouse had this to say on May 19, 2006 Posts: 1
  • The only thing that kept AMD out of chapter 11 was superior innovation—you do remember the original Athlon, right? Now they have grabbed so much market share from Intel that even Dell is using their chips. I wouldn’t call them a follower by any stretch of the imagination.

    Aurora77 had this to say on May 19, 2006 Posts: 35
  • I think AMD and MS raise interesting points.

    I don’t know what to make of AMD right now. I secretly think we could see really interesting things from them over the next few years. Certainly I’m more interested in watching the direction they take than that of intel, and this brilliant article sheds some light:
    [AMD] may not be on the cutting edge at all things, but the end result is a system that is ‘right’ in more ways than several other implementations.

    With regard to MS, read this article. I found it really chilling. Imagine a windows with MSN search really deeply integrated so that it was super easy, unignorably easy, to search and do all other web-oriented things from constant links within the windows environment. Imagine all these things just “there”, no fussing about with URLs, no installing anything. They could simply have their >90% of computer users in their pockets. And what’s more, they can afford to spend a long time and vast amounts of money cementing their dominance, in the same way they have with xBox, which they have poured their billions into as only they can and to great allegiance from the new multitude of xbox fanbois. And I really loathe them for that. Not because all their products are bad, but because their success is won in such an anticompetitive way. It just sucks.

    It sucks because other companies deserve to be successful but can’t compete with, or have to risk everything to compete with, the monolithic sh** with its toxic billions.

    Benji had this to say on May 19, 2006 Posts: 927
  • And I don’t think the xbox 360 is selling badly. I think they’re selling all the units they’re making.

    Benji had this to say on May 19, 2006 Posts: 927
  • Some responses:

    Devanshu Mehta

    I feel that Amazon, Yahoo and eBay are all doing well, but I am not seeing anything that is all that revolutionary. Yes Skype may turn out to be big, but that is kind of shaky at the moment. As for Flickr, I will wait till Yahoo starts making money off of that before I cheer too loud. And I can’t say that I am that impressed with Amazon’s prospects. Finding new ways to sell me your products isn’t the same thing as finding new products to sell. (or services to offer)


    By the xbox I meant the entire division, not just the console. The original xbox was fairly nice (and boasted better specs than the PS 2 I would remind you) and the xbox 360 is quite as impressive as well. Xbox live has gotten rave reviews from every source I have seen, Bungie (which MS owns) is producing one of the best games for any platform in the Halo series. So, overall I would say that the xbox division is doing wonderful. Their only problem has been supply issues which in turn have hurt sales. At 5 months + since the Christmas boom has ended there is no reason for these kinds of shortages. But other than that they have a stellar track record.


    AMD is making the best chips possible with today’s technology. Intel is making really great chips with tommorrow’s technology. Intel has a clear plan for driving growth, AMD is just waiting to copy Intel and (maybe) do a similar/better product. When they create something that can compete on equal footing with the Core Duo chips, then I will listen. Until then they are just following Intel’s lead.

    Ben Hall

    Given MS’s track record as of late, if they can pull off what you are suggesting, I will be first in line to buy a Dell preloaded with Vista. Somehow though, I just don’t see it happening.

    James R. Stoup had this to say on May 19, 2006 Posts: 122
  • Since there hasn’t been a major upgrade to AMD’s core technology in a little while, I’d say that AMD is making the best chips possible with yesterday’s technology. Intel is developing the core (no pun intended) technology further, but real innovation is in terms of gain to the end-user and after reading the first article i linked to above, I’m more impressed with AMD’s stance on that.

    Theoretical number-crunching capacity and flashy Core 2 Whatsit marketing are impressive but not the stuff really advantageous technology is necessarily made of.

    Benji had this to say on May 19, 2006 Posts: 927
  • By the way, I really like the idea of this article! Broad tech industry reviews wock.

    Benji had this to say on May 19, 2006 Posts: 927
  • James! How could you leave out Nintendo? I know you want a Wii as much as the rest of us. Nintendo should go in your Trail Blazers. Although I don’t see a lot of difference between Innovators and Trail Blazers.

    Also, I gotta wonder if Apple weren’t using Intel chips, would you rate them as favorably? Seems until 12 mths ago, all Apple commentators were saying Intel was lumbering and struggling and getting blown away by AMD’s innovation. Has Intel turned it round in the last 12 months?

    BTW Totally irrelevant but that dice pic is great photo.

    Chris Howard had this to say on May 19, 2006 Posts: 1209
  • I have recently visited AMD’s brand-spanking new megaplants in Dresden, Deutschland and witnessed first hand that AMD does not and will not be a follower in the present and future CPU architecture wars.

    There, multicore designs are already being tested in their labs on more advanced designs than Intel’s n-core products.

    The new metric for measuring a CPU’s performance is throughput-per-watt not megahertz any longer and these new AMD designs are an indication that AMD is here to lead in innovation not a follower.

    Robomac had this to say on May 19, 2006 Posts: 846
  • I mostly agree, especially about Microsoft and Dell.
    However, I really don’t agree with the Apple opinion.
    Apple has just sold all it’s customers, and more importantly, the rest of the world, down the river.
    By this I mean the real reason they switched to Intel. Their greed to control the music downloads market has led them to switch to Intel for one reason, and one reason only. DRM. They will jump fully on the TCPM initiative, lock users out of their own computers, and remove the last impediment to this Orwellian nightmare taking place. If you don’t believe me, look at what Apple has just done. They’ve closed sourced the Intel port kernel, but not the PPC version.
    Given that the OS and Kernel are a key part of the TCPM system, it makes sense.

    I only hope that the public will realize what Apple has done and revolt. Don’t buy the Intel Mac’s. Don’t use DRM locked products. e-mail Apple and complain.

    Tachyon had this to say on May 20, 2006 Posts: 1
  • And the fact that they couldn’t remain competitive with the trailing performance of powerpc has NOTHING to do with it. Of course, silly me.

    I fail to see how the choice of processor impacts on itunes DRM. I draw your attention to this article.

    & if you give it a second thought, there are obvious reasons to close the intel kernel (sad though that is) that do not apply to the powerpc version.

    Sad though I am to see apple switch to intel, I can’t possibly go along with the DRM theories. From a comment on the above article: If Apple wanted TCPA, they could have added it to their PowerPC machines.

    Benji had this to say on May 20, 2006 Posts: 927
  • Hardly a challenging topic for an Apple site.  After all, it seems the company is finally getting the recognition that its fans have been wanting for the past decade or more.  How safe is it to say that Apple should be a trailblazing tech entity?  Or Google for that matter?  Google?  NOT all things to all people?  Last time I checked they virtually had a site or a piece of software for just about everything.  Not that I’m complaining, I think they make great stuff - wait - great FREE stuff - but they have their hands in more cookie jars than I can count.

    As far as eBay and Amazon, yeah, it’s a shame that the modern world and the modern shareholder demand so much.  Here are two great services that inevitably MUST expand in some capacity or face the wrath of the almight stale stock value.  Too bad, they’re both so good at what they do best.  I hear that groceries are coming soon to an page near me… Something about that just makes me cringe.

    AMD?  Used to love ‘em.  Intel?  Recently learned to love ‘em.  Now that the GHz war is officially over and I lost (thousands) I’m really hoping that both of these companies continue to duke it out.  I’m far more excited at the prospect of a DozenCore CPU than I am of reaching 5GHz.  I can only hope that they invest more in R&D and less in their respective legal depts.

    Xbox?  Is that thing still around?  Oh yeah.. the 360…  At this time last year I was drooling over such a thing.  Oddly enough I just don’t care anymore.  Like I said, I lost the GHz war trying to have the best gaming rig around for several years running.  Next to a great PC, Xbox 360 just seems kind of lame, so lame that I’ve almost forgotten it came out.  Will Wii win?  Will PS3 ever materialize?  Will Microsoft ever figure out that good games make great consoles?  Maybe, maybe not.  In the meantime my Intel iMac plays a bitchin’ game of Counterstrike though ... it’s almost worth the time it takes to restart into XP.  I don’t know though, I just don’t see Xbox being the savior of Microsoft, not even close.  I have high hopes for Vista, not because I care to use it, but because of the competitive spirit it might just give to Apple.  Future version of OS X can only benefit from Vista being a very cool experience.

    HP?  hahahahahahahaha.  Yeah right. 

    And finally… DRM.  Yes folks, DRM is the future of entertainment media.  By God it’s going to be just like it was only a few short years ago… We’ll have to pay for movies and music, hell MAYBE even software!  Oh no!  And yeah I suppose we can stress out that the iTunes I buy today might not work on the Plays For Sure device that takes over the world tomorrow but I really wasn’t expecting it to.  That’d be like trying to shove my cassettes into my CD player.  The entertainment industry rapes its own customers, why is everyone so surprised by this?  They’ve done it for longer than any of us have been alive and they’ll do it long after we’re gone.

    dickrichards2000 had this to say on May 21, 2006 Posts: 112
  • I’m really hoping that both of these companies continue to duke it out.  I’m far more excited at the prospect of a DozenCore CPU than I am of reaching 5GHz.

    The problem I see is that seeing them ‘duke it out’ by just adding more and more cores seems to be leading to a new Core War just as silly as the MHz war. I’m concerned that the nature of the game is they aren’t able to compete on the most productive, useful implementation of technology but by some simple delineation, be it MHz or number of cores, that is highly marketable/spinnable but potentially misleading.

    Benji had this to say on May 21, 2006 Posts: 927
  • Just thought I’d point out a factual error in your article.  AMD is widely regarded outside the Apple world as having a superior archicture to Intel and hence higher performance in both speed and performance-per-watt.  Even the latest Core Duo product is only playing catch-up to AMD’s multicores from last year and they still no answer to AMD’s sophisticated HyperTransport technology.  Conroe may level the playing field, but to call Intel an “innovator” and AMD a “successful follower” smacks of good old fashioned ignorance that us Apple folk are so often guilty of.

    You can verify this by visiting, trawling through last year’s “” articles and of course the stock market ( gives a nice view of the picture if you look at Intel and AMD over a 6 month period and shows all relevant news over that period).

    brendon9x had this to say on May 22, 2006 Posts: 1
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