What Went Wrong at Nortel
Against this backdrop, it will be interesting to see how Nortel sells off some its juiciest assets. The firm may even keep hold of some of its patents for the Long Term Evolution (LTE) technology used in 4G networks, according to the
Light Reading web site, possibly to eke out more revenue during the coming months.
Nortel, of course, is not the only company with problems. Rival Alcatel-Lucent (ALU), for example, recently reported its ninth consecutive quarterly loss. Despite weak demand and stiff competition, however, Alcatel-Lucent is unlikely to follow Nortel's path.
"I think that Alcatel-Lucent is a lot more resilient," said Alvarez. "They have a strong service provider side and a strong services business."
Consolidation, rather than bankruptcy, will characterize the tech market during the next few years, as big-name firms seek out cut-price deals.
Nortel's fall from grace may not have generated as many headlines as General Motors (GMGMQ) and Chrysler during the last few months, but it should serve as a warning to other tech firms looking to survive the recession in one piece.
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