No. Face­book is No Friend of Hard­ware Cos

The Economic Times - - Disruption: Startups & Tech -

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

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