Technology could be a relative standout for the county’s economy next year with more projected spending on consumer electronics and corporate technology.
Spending on data storage, software and computers by businesses is expected to see “another solid year of recovery,” said Frank Gens, senior vice president and chief analyst at Framingham, Mass.-based market researcher International Data Corp.
Global spending on information technology could grow by 5.7% to $1.6 trillion in 2011, according to IDC.
Most of the growth is set to come from emerging markets, which are expected to generate more than half of all “new” technology spending next year.
Spending on computer products is expected to grow roughly 8%. Software spending is seen rising 5%.
Corporate technology spending is key for several companies here, including Aliso Viejo’s QLogic Corp., Costa Mesa’s Emulex Corp., Irvine-based Epicor Software Corp., Irvine’s Sage Software Inc. and Quest Software Inc. of Aliso Viejo.
Spending is expected to grow fastest for new technologies seen as taking root next year. One of those is cloud computing, where hefty applications and databases are outsourced to servers run by others.
Spending on cloud services are seen growing 30% next year.
Stamford, Conn.-based Gartner Inc., another technology market researcher, is more conservative in its corporate spending outlook.
It forecasts 3.5% growth next year as its “most likely scenario.”
Modest growth also is seen for the consumer electronics industry next year.
Consumer electronics are a big driver for many local companies, including Irvine’s Broadcom Corp., Santa Ana’s Ingram Micro Inc., Lake Forest’s Western Digital Corp. and Santa Ana’s Smith Micro Software Inc.
“This year we’ve got things pegged as moving up just a few percentage points,” said Shawn DuBravac, chief economist at the Consumer Electronics Association, a Virginia-based trade group that represents makers of TVs, DVD players, cell phones, video game consoles and other devices. “In 2011 we expect to get close to pre-recession levels.”
U.S. consumer electronics sales are seen as growing 4% to $182 billion, according to the association. That’s close to 2008’s total of $185 billion.
El Segundo-based iSuppli Corp., a market tracker with a broader definition of the consumer electronics market, sees sales totaling $356 billion in 2011, also up 4% from 2010.
Next year is seen as “the year of the tablet” computer, according to the Consumer Electronics Association’s DuBravac.
“Tablets will be one of the key drivers as we look at 2011,” he said. “We expect to see north of 50 million tablets shipping next year.”
As with other areas, the biggest drag on technology stands to be persistent unemployment, said Jordan Selburn, an iSuppli analyst.
“Potential trouble could lie ahead, especially if the fragile economic recovery unspools and consumers decide to withhold precious spending dollars,” Selburn said.
PERSON TO WATCH
Simon Biddiscombe
2011 will be first full year on the job for new QLogic Corp. Chief Executive Simon Biddiscombe.
Biddiscombe, who became chief executive in November, has big shoes to fill at the Aliso Viejo-based maker of chips, boards and switches that speed up the flow of data on storage networks.
Biddiscombe’s move comes after QLogic’s 15 years under H.K. Desai, one of the county’s longest-running technology executives.
He’ll be just the third boss QLogic has known since its 1994 spinoff from Costa Mesa’s Emulex Corp.
Biddscombe has to prove to Wall Street that he can get QLogic up to speed in the heated competition with Emulex to secure customers for a new technology, dubbed converged networking, which is seen as taking hold next year.
So far, Emulex appears to have an early lead, with dozens of design wins.
Analysts already know and like Biddiscombe.
“He has built a very solid relationship with Wall Street,” said Brent Bracelin, an analyst at Pacific Crest Securities in Oregon.
Biddiscombe doesn’t have an engineering background. Has been QLogic’s senior vice president and chief financial officer since early 2008, when he was recruited from a similar post at Newport Beach chipmaker Mindspeed Technologies Inc.
—Sarah Tolkoff
COMPANY TO WATCH
Wispry Inc.
Irvine chipmaker WiSpry Inc., one of the area’s best-funded startups, is back on our radar.
A few years ago, we pegged WiSpry as a top contender for a public offering. But production delays and a management shakeup have put an offering on the backburner.
Next year, we see the eight-year-old company working to right itself and start bringing in meaningful revenue.
“It would be fair to say the technology development has taken a bit longer than planned, but the market remains strong,” Chief Executive Jeff Hilbert said.
WiSpry is worth watching for its chips—they manage internal antennas in cell phones, often the most finicky part of a phone.
The chips help extend the battery life and make for fewer dropped calls. They also allow for slimmer, sleeker phones.
WiSpry landed its first big customer in 2009. The customer, a top cell phone maker, hasn’t been named.
Even so, things slowed a bit this year for WiSpry, according to Hilbert.
“The schedule we were on called for us to be ramping into production between today and next quarter, but the customer’s introduction window for those phones shifted,” he said.
An exit for WiSpry’s investors—most likely an acquisition—is farther down the line, Hilbert said.
“My guess is it will be toward the end of 2012 or the beginning of 2013,” he said.
Hilbert, a founder of WiSpry, stepped into the top spot in June after Russell Garcia stepped aside.
—Sarah Tolkoff
