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5 Tech Flops Left Out of the Rally

The tech rally of 2011 has left a few notable giants out of the jamboree.

As big names in mobile like Apple and Google continue to ride the upswing in investor interest, outfits like Nokia, Cisco, Microsoft, Activision Blizzard and Intel have demonstrated an alarming ineptitude in the face of competition.

As the Nasdaq gets off to a roaring 6% start to the year, these five are the players with the largest market caps in the tech sector headed in the other direction.

Intel remains stymied in mobile as smartphones and tablets take an entirely different path in chips. And despite its Call of Duty franchise sales success, video game maker Activision hasn't had enough other big hits to counter rival Electronic Arts in gaining investor interest. Cisco's skid has worsened as weak IT spending continues to darken the networker's outlook.

Read on for more about the five tech giants that aren't winning the affections of the tech investing crowd.

No. 5: Intel

Intel's long run as the monopolistic chip supplier to the PC industry -- once the foundation of its strength -- is now the place where the company is increasingly stranded.

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This month has been a small illustration of Intel's hapless effort to expand beyond computers to mobile devices. Last week, as Intel closed its $1.4 billion acquisition of Apple iPhone chip supplier Infineon, Verizon started selling the iPhone 4 -- which features chips from Qualcomm, not Infineon.

Then on Friday, Nokia said it was opting for Microsoft's Windows mobile software, a huge setback to the Intel-backed MeeGo project.

And earlier this month, Intel cut its earnings guidance after glitches with its new Sandy Bridge PC chips forced a costly recall.

Maybe better months are ahead for Intel, but Wall Street's been getting behind Qualcomm and ARM Holdings in this race.

No. 4: Microsoft

Microsoft's stock is statuesque. The price has stood in the same place for a decade.

How apathetic is the investment community about Microsoft? Here's a recent example.

On Friday, when the No. 1 phone company in the world said it was dropping its own software in favor of Microsoft's Windows Phone 7 operating system, Microsoft's stock ended the day down nearly half a percentage point.

You don't find that kind of widely-held market ambivalence in a lot of stocks, but Microsoft has earned it. Its Windows franchise has recovered from the Vista debacle and the Xbox is a big hit. But for every step forward ...

Microsoft's bold attempt to re-enter the mobile market with Windows Phone 7 has failed to make a ripple on the big pond occupied by Apple and Android. And earlier this month, its No. 2 search engine Bing was caught copying the query results of No. 1 searcher Google.

Microsoft has become a stock only pigeons and dividend collectors can love.

How the mighty have fallen

No. 3: Cisco

Cisco's position atop the networking equipment sector looked threatened in November when the company offered a weak outlook. But what was merely dicey in November was confirmed to be serious last week when Cisco offered yet another dim forecast.

Cisco warned that IT budget cuts among government customers -- along with plunging demand for cable TV set-top boxes -- was a continuing drag on sales growth.

If anything, Cisco's slide proves that geographic and product diversity doesn't always insulate you from spending cuts.

Wall Street hasn't exactly held on to any optimism trying to wait out the gloom. Cisco shares -- after falling 18% in 2010 -- have fallen another 7% so far this year.

No. 2: Activision Blizzard

Guitar Hero is heroic no more, for Activision.

The video game giant killed its formerly huge music franchise last week and warned that sales were slowing more than analysts expected.

The news knocked 10% of the stock price Wednesday and helped push Activision down 13% so far this year.

As analysts wonder how Activision will surpass -- or even continue -- the growth it saw last year from its two top-selling games, it's safe to say that business is starting to look as grim as a Call of Duty scene.

No. 1: Nokia

How the mighty Nok has fallen.

New chief Stephen Elop, proud author of the "burning platform" letter to employees, announced Friday that the company was tossing aside its own software future and tying its fortunes to Microsoft's Windows Phone 7.

The move will cause Nokia to lose as much as 10 percentage points of market share by some analysts' estimates, and risk a dip into red ink while new Microsoft phones are being developed. The move will put Nokia well behind Apple and Google's Android operating system and drop it behind even Research In Motion in the smartphone race.

Investors wanted a quick Google Android-flavored fix, but they received a bitter Windows option instead.

Nokia shares have fallen 24% in the past week on fears that Nokia's strategy shift and a lengthy retooling effort will lead to years of damage.

One thing you can't say about Nokia's Elop: he didn't take the easy route to a turnaround.

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