Mergers and acquisitions (M&A) among technology companies is experiencing a major boom as a result of substantial investment capital, stronger stock markets, and weak demand for initial public offerings (IPOs). Investment bankers and technology industry executives believe the increased M&A activity is due to the fact that investors have a lot of cash, while the strengthening economy has added to corporate resources. Confidence in the technology market is increasing along with the larger amounts of cash as well. At the same time that investors are staying away from all but the largest IPOs, the cost of regulatory compliance is making it difficult for small public companies to remain independent. The industry sectors most attractive for acquisitions in 2006 include digital television, enterprise products like software, smart phone applications, image recognition, and test equipment. Worldwide, M&A activity increased significantly in 2005 as compared to 2004. In the electronics industry, computing and peripherals firm acquisitions saw the greatest increase in 2005. Small companies have their own reasons for turning to M&A, the most common of which is the weak IPO market. Some financial experts warn that a weaker economy could reduce M&A activity in 2007. In particular, they are concerned about rising energy prices and interest rates, combined with a slowdown in home refinancing, which could hinder consumer spending in the U.S.