No. Facebook is No Friend of Hardware Cos
Quentin Hardy & Mike Isaac
San Francisco: Mark Zuckerberg, Facebook’s chief executive, is clear about his vision for his company: he wants to triple the size of his social network, which now has 1.6 billion members.
But to reach that new audience, he has to find a way to change telecommunications networks to make connecting to the Internet more affordable, since many of those would-be Facebook users live in developing countries. That could be bad news for the companies that make equipment for those networks, whether they are Silicon Valley giants like Cisco Systems or little widget makers that produce the parts to tie different pieces of the net- work together.
“There is definitely going to be some pressure, some consolidation” for many tech equipment suppliers, said Akshay Sharma, research director at the technology advisory firm Gartner. “If you’re in hardware, you’re going to reduce head count from thousands to ma- ybe 10 people, a hundred at most.”
No doubt, Zuckerberg’s grand — some would say grandiose — vision could take years to realise. But if he manages to make the way people connect to the Internet more affordable, it would be just the latest instance of how the company has quietly upended the traditional economics of the technology industry. Facebook has changed the way people interact with their friends on the Internet. But less understood outside tech circles is how the social network has come to be perhaps the most aggressive example of a growing number of companies that are unwilling to pay top dollar for products made by traditional technology suppliers.
— NYT News Service