There have been many noteworthy developments in the technology space recently. Some of these will likely have a material impact on the companies in the sector and the markets they serve.

Important Developments at Microsoft

Microsoft (MSFT - Free Microsoft Stock Report) Chief Executive Officer Steve Ballmer has announced his intention to retire within the next year. Mr. Ballmer will remain at the helm as the Board of Directors conducts a search for a new chief executive. The company has achieved long-term success in the corporate and commercial arenas. However, it has not been able to establish similar dominance in the markets for retail devices. Given stiff competition, we think some investors have been looking for a change in direction, and hope that new leadership will allow Microsoft to exploit its core strengths in an evolving marketplace. The shares rallied on the news, but the run up proved short lived.

Microsoft stock fell somewhat, following news the company had agreed to acquire substantially all of Nokia Corporation’s (NOK) Devices and Services business and a portfolio of patents for total consideration of about $7.2 billion (5.44 billion euros). The deal is expected to close in the first quarter of 2014. Shares of Nokia advanced considerably following the announcement. Microsoft is looking to transform itself from a software provider that develops operating systems and applications for desktop and laptop computers to a company that delivers offerings for any device with an Internet connection. Microsoft has been trying to adapt to an increasingly mobile world, as a growing number of customers utilize smartphones and tablet computers, rather than traditional PCs. It is looking to gain market share in this arena from rivals such as Google (GOOG) and Apple (AAPL).

Lackluster Guidance

A couple of large technology companies have issued unimpressive guidance. Cisco Systems (CSCO - Free Cisco Systems Stock Report) expects relatively modest top-line growth for the October period, though share net will probably advance at a somewhat faster clip. The company has decided to cut its global workforce by 4,000 employees (around 5%), in order to try to grow earnings at a faster rate than revenues and in response to macroeconomic weakness. Economic challenges in a number of countries in Asia have hurt orders, and Southern Europe remains a source of concern.

Hewlett-Packard (HPQ - Free Hewlett-Packard Stock Report) has indicated that it expects weakness in the consumer personal computer market to persist in the October quarter, and pricing pressure in the printing, personal computers, and server markets to continue. Moreover, it doesn’t expect any top-line growth in the next fiscal year (which begins in November). The company is making some progress in improving operations, but recovery will likely remain a multiyear process. Its printing, enterprise services, storage, and software operations have experienced some improvement, though the industry standard servers and personal computers lines have yet to rebound.

Gadget Month

A number of new gadgets offered by some leading technology companies are expected to be unveiled at the annual IFA consumer electronics trade show in Berlin this week. Sony Corp. (SNE) is expected to introduce its next flagship smartphone. Meanwhile, Samsung Electronics should unveil its latest Galaxy Note smartphone along with a smartwatch called Galaxy Gear. Perhaps most anticipated, Apple is expected to host an event on September 10th. Rumor has it the company will announce two new smartphones, and an iPhone trade-in program. Apple’s next generation of iPhone models is expected to include the iPhone 5S (which should have a faster processor and an upgraded camera, among other features) and the iPhone 5C (a lower-cost model).

At the time of this article’s writing, the author did not have positions in any of the companies mentioned.