CES in Las Vegas begins: image maintenance for damaged tech giants

The Consumer Electronics Show, CES for short, starts in Las Vegas. Traditionally, the focus is on the tech giants from Silicon Valley. But their shiny image has been scratched in the past year.

Amazon, Apple, Microsoft, Netflix, Tesla, Meta and Google parent company Alphabet. For a long time, these tech companies stood for one thing above all: endless and unstoppable growth. These corporations have set standards in many areas. The turning point came last year: there were no orders, the number of subscriptions fell and employees were laid off. A black year for the industry.

“On the one hand, there were some stocks that were overvalued,” says digital expert Roland Fiege, explaining the reasons. On the other hand, inflation and the associated fear of interest rate increases had a negative impact. Third factor: “Ad-moneyed tech stocks have seen declining ad revenue, which has impacted results.”

And fourth, according to Fiege: “A lack of results – apart from Apple – which didn’t inspire normal investors either.” The result: the five most valuable tech companies alone, Apple, Microsoft, Alphabet, Amazon and Meta, have lost almost four billion dollars in market value; stocks plummeted.

Start-ups are also suffering

The crisis of the giants now seems to be reaching the smaller innovation engines of the tech start-ups as well. While investors were still busy promoting new ideas in 2021, the total investment fell by half last year to almost twelve billion dollars.

Sebastian Klöß from the Bitkom industry association still sees positive aspects: “Start-ups have the opportunity to develop fast and innovative solutions. They can then sell them themselves.” Often, however, the small companies would also become part of large companies – or even become a large company of the future: “Even all of today’s tech giants ultimately started as small start-ups,” Klöß points out.

Digitization as an opportunity

The industry is changing, and so are consumer expectations. Technologies should no longer only be entertaining and simplify life, but used to solve future issues. Kim Klebolte, managing director of the “Digital for All” initiative, also demands this.

“Together with the big technology companies, we must succeed in understanding digitization even more as an opportunity and use it to help solve the major challenges of the future.” And that, according to Klebolte, is primarily the issues of climate change, demographic change and the shortage of skilled workers.

“No panic”

A life without the products of the big tech companies: Hardly anyone can imagine that anymore. Digital expert Fiege is therefore calm about the slump in tech stocks. The course corrections of the past year are in part immense. But: “Of course there are investors who are using these low prices to buy heavily.” The losses did not change the fact that tech stocks will continue to dominate the area, according to Fiege: “So don’t panic.”