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JULY 3, 2006 
How The Mighty Have Fallen Some of last year's strongest players didn't make the IT 100 list this time
SAMSUNG ELECTRONICS Asia's most profitable IT company, Samsung Electronics, cranked out $8 billion in earnings in 2005. So why has it slipped off the IT 100, from last year's ranking at No. 5? Blame falling prices of memory chips and liquid-crystal displays, two of Samsung's major money spinners. As a result, revenues fell 2% last year, to $84.5 billion. Samsung's results were also hurt by the strength of the South Korean currency, the won. The world's third-largest mobile-phone maker after Nokia Corp. (NOK ) and Motorola Inc. (MOT ), Samsung sold a record 102.9 million handsets in 2005, but profits from that business fell 20% as it missed out on the boom in low-end handsets for emerging markets. Samsung is targeting an 11% rise in sales this year, but with the won already up 5.6% against the dollar this year, that goal may prove elusive. IBM Some companies tumble because they screw up. In the case of IBM (IBM ), it exited an industry. Last year, No.44 IBM sold its $11 billion PC business—which was rarely profitable—to Lenovo Group Ltd. (LNVGY ). That let it concentrate on selling tech services, server machines, and software. In the first quarter of this year, net income from ongoing businesses was up 21%, to $1.7 billion. But sales were flat, in part reflecting IBM's stagnant services business, which faces tough competition from Accenture Ltd. (ACN ) and from India's tech services upstarts. That's one reason Wall Street isn't excited; the stock is down 5% since Jan. 1, to about 78. FRANCE TÉLÉCOM France Télécom (FTE ), the former state-owned telephone monopoly, has pushed into broadband and mobile services to offset stagnation in its traditional fixed-line phone business. Over the past few years it has reabsorbed mobile-phone and Internet businesses that it earlier had spun off, providing a boost to sales and margins, and helping propel it to No.45 on the IT 100 in 2005. But these days it's struggling against competitors such as French company Iliad that have lured away customers with cheap bundled deals for phone, Internet, and television. Since Chief Executive Didier Lombard came aboard in February, 2005, France Télécom's share price has fallen by almost a third. Although profits last year nearly doubled, to $7.2 billion, revenues rose a meager 2.5%, to $62 billion. INTEL The most blue-chip of chip companies, Intel Corp. (INTC ) is suffering at the hands of rival Advanced Micro Devices Inc. (AMD ) Intel, No.52 last year, watched sales erode and margins slip. In one high-profile blow, Dell Inc. (DELL ), which used to buy all its chips from Intel, in May said it expects to begin purchasing some server chips from AMD. After posting a 15% increase in 2005 income on a revenue gain of 13%, Intel in the April quarter posted a 5% decline in sales and a 38% drop in income. Intel is now cutting prices on some older chips to try to regain share. That could further weaken its sales despite the long-awaited introduction of its energy-sipping Core 2 Duo products. 
BW MALL
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