Altera Financial Analysis

Macro Economy Analysis

Current Economic State

The world economy continues to recover from the recession caused by the fall of the US housing market in 2008. An uneven resurgence has been observed in which advanced economies are struggling in comparison to emerging ones. The volatile state of the economy is also attributed to the present Euro debt crisis, which has weakened global markets. Factors such as a lower than average Gross Domestic Product (expected at 3%) and high inflation rates, are indicative of the economy’s contracted state. Consequently, consumer purchasing power has decreased lowering spending on luxury items. The effect on such companies is substantial, decreasing sales and increasing the unemployment rate.

IT Industry

Many companies struggle to stay alive despite the economic forces working against them, such is true for those within the sector of information technology. As part of the global market, these companies face pressure on sales, earnings and greater market exposure due to the weak performance of counterparts in Europe and the US. Despite these economic obstacles, this industry has been growing and expanding at an accelerated pace over the last decade. IT has changed the way of living by enabling communication; improve standards of living and increasing opportunities across the globe. Its customer base is broad and environments in which it operates are very complex. The use of information technology solves crucial productivity issues such as reducing costs and increasing operational efficiency. As societies around the world become ever more hyper connected through technological sources, such an impact from information technology on critical sectors such as government, healthcare, business, workforces and that on sustainability is evident. IT contributes to an enhanced quality of life globally and so creates endless opportunities for economic growth. Widespread adoption of the products and services developed by this industry is motivated by several factors. These include, advancing the importance of digitization on the national agenda, evolving sector governance structure, adopting an ecosystem perspective, enabling competition and stimulating demand.

Current Trends

According to the International Data Corporation (IDC), “the digital universe is now expected to double every two years”. Radical changes are being brought about by the emergence of more powerful technologies, new ways of accessing and integrating IT in multiple devices (e.g., through mobile broadband), and in the development of new ways in producing digital content (e.g., via social networks.)This has sparked a major industry trend; the convergence among the Information and Communications Technologies, telecommunications, and media industries. Moreover, other key trends