Sectornomics: Technology

10 tech giants that let their big lead slip away

Will Crocker | Getty Images

Tech giants like Google, Apple and Samsung may seem eternal at the moment, but technology is an industry in which a slide from the top is all but inevitable. Leaders come and go regularly—and today's tech giants can become a mere shadow of themselves in quick fashion.

These breakdowns aren't necessarily fatal. The companies who have them may survive and even continue to be profitable. But they cede the cachet they once had as king of their hill to a competitor who was either more nimble or had better insight into the way the industry was evolving.

Here's a look at 10 companies who once commanded their industries but have since fallen from the top spot.

By Chris Morris
Posted on 06 April 2015


Atari 2600 VCS console.
Robee Shepherd | Getty Images

Atari didn't launch the in-home video game industry—that honor goes to Intellivision—but it certainly was the first to fully capitalize on the phenomenon. The Atari 2600 was the beginning of the end for arcades and cleared the path for Nintendo, Sony and Microsoft. Atari's lack of quality control on the system's software titles eventually began to frustrate customers, though. And the follow-up to the 260—the Atari 5200—was a flop, thanks to poor controllers and a $270 price tag (roughly $675 today). When the recession of 1983 happened, the company slid further. Atari's still around today, but largely as a ghost of its old self.


A Commodore C64 computer
Getty Images

After falling short in the typewriter and calculator industries in its early days, Commodore International got in on the ground floor of personal computers, eventually producing the Commodore 64, which went on to become the best-selling computer of its time (with 22 million sold). Much of that was due to the company's willingness to battle on price, something that caused conflict between the board of directors and co-founder Jack Tramiel, who ultimately left the company and started a competitor (and, ironically, bought Atari). Commodore, meanwhile, couldn't keep up with the pace of innovation in the industry and was eventually overshadowed by companies like IBM.


An old webpage by GeoCities for Dave Matthews Band.
Source: GeoCities

Long before Facebook and WordPress, there was GeoCities. In 1999 it was the third most-visited site on the Internet, prompting fellow tech giant Yahoo to buy it for $3.57 billion that same year. But when Yahoo changed the terms of service and claimed ownership over all content on the pages, users left. While that policy was later reversed, the damage was done, and when the dot-com bubble burst, there was no going back. Yahoo shut the service down in 2009.


The new Yahoo! website homepage is seen on a laptop in front of the older version May 16, 2006 in San Francisco, California.
Getty Images

During the early dot-com days, no company could touch Yahoo. Quickly establishing itself as a search giant, it racked up billions of dollars—later spending much of that money to buy notable Internet companies, including HotJobs, Flickr, GeoCities and—as it attempted to expand its footprint. Eventually, though, the company's search technology was overshadowed by Google, and an executive battle led to the departure of Jeff Mallett, who led the company through its growth period.

When the dot-com bubble burst, things got worse. A 2006 memo, known as the Peanut Butter Manifesto, accused the company of being spread too thin, with no unit receiving any real focus. A revolving door in the CEO suite in recent years hasn't helped matters, either. Yahoo's in a much better place stockwise than it was five years ago, but it's no longer considered the leader it once was.


Early 1980s Sony Walkman WM-2 with its plastic belt and battery holder.
Image source: Wikipedia

Sony is a cautionary tale for today's tech giants. No matter how ahead of the pack you are, you need to keep innovating. The company that revolutionized the music industry with the Walkman and compact disc failed to see the coming rise of the MP3. When Apple unveiled the iPod—and the iTunes store—it was a solid body blow to Sony.

Samsung, meanwhile, made Sony's Trinitron TVs, once the industry leader, less desirable by being the first manufacturer to perfect the flat-panel design. And the company was struggling with bloat after acquiring so many divisions, letting corporate politics and bureaucracy stifle innovation. The PlayStation remains a success, but today Sony is struggling to regain its position as a tech leader, and its CEO recently unveiled a plan to split off the company's audio and video business.

Research in Motion

A man uses his Blackberry device on Thursday, December 21, 2006.
Daniel Acker | Bloomberg | Getty Images

Not too long ago, the Blackberry was the top mobile device for movers and shakers. But the introduction of the iPhone took much of the wind out of its sails. With a larger, clearer screen, better graphics and more versatility, the smartphone began to take off among consumers. Blackberry held on to its business clients for a while, but those, too, ultimately began to shift to other devices. The company made several attempts to update its products—and in 2009 was named by Fortune magazine as the world's fastest-growing company.

An awful tablet, a major service interruption and an executive shuffle further hurt the company, though. In 2013 it laid off more than 4,500 people and was almost sold, until an investor injected $1 billion into the company. The company recently returned to profitability—something its new CEO, turnaround specialist John Chen has been trumpeting—but investors aren't sold on its long-term viability: Shares are down 17 percent so far this year.


A model displays the new Nokia 'E90' mobile phone sets during a launching ceremony in Jakarta, 13 June 2007. Nokia 'E90' communicator launched 13 June for the Indonesian market
Ahmad Zamroni | AFP | Getty Images

In 2007, Nokia was the king of the wireless world, commanding 41 percent of the market. But the rise of Apple's iPhone and Samsung's Galaxy (and other Android devices) quickly began to eat into that share as Nokia didn't feel a sense of urgency to change its standard design. In 2010 the company made a big gamble and dropped its proprietary software and adopted Microsoft's Windows Phone operating system. Consumers, though, didn't flock to the devices, and last year Nokia, which was once the flagship business of Finland, was sold to Microsoft for $7.2 billion.


Panasonic's prototype Ultra Thin 1/3-inch thick plasma television is displayed at the 2009 International Consumer Electronics Show at the Las Vegas Convention Center January 10, 2009 in Las Vegas, Nevada.
Getty Images

At the beginning of the high-definition era of TVs, Panasonic's plasma sets were the envy of videophiles everywhere. Featuring deep black levels and sharp picture quality, they were the must-have item for home theater owners. But as LCD and LED sets began to hit the market, Panasonic stuck by plasma, insisting the quality was better. That may have been true initially, but LED sets quickly caught up and were much more affordable. Panasonic quit making plasma sets a year ago, and while it is still in the TV manufacturing business, Samsung is now the industry leader.

Radio Shack

Adam Jeffery | CNBC

The fall of Radio Shack took place in slow motion, as customers of the one-time electronics giant gradually began shifting their shopping habits to competitors, then online. A brief success selling phones fell apart when carriers opened their own stores. And the launch of the smartphone did away with the need for many of Radio Shack's go-to items, like tape recorders, answering machines and GPS systems. Unable to find a comfortable niche despite several attempts at rebranding itself, the store filed for bankruptcy earlier this year and is in the process of shutting down many of its stores.


Kodak film is seen alongside a vintage Leica M3 35mm rangefinder camera, April 30, 2013, in Chicago.
Getty Images

Kodak virtually owned the film business for almost a century, but the rise of digital photography would prove to be its undoing. The great irony there is that a Kodak scientist had actually invented the first digital camera in 1975. It failed to see the potential in the creation, though, and continued to focus on film for too long a time. Now the company is doing what many failed tech titans have adopted as a strategy in recent years: trying to monetize its war chest of patents.