Large tech giants released strong quarterly earnings reports on Thursday, taking full advantage of the needs of consumers hit by the pandemic, while at the same time scrutinizing their economic strength more and more stringent.
Facebook, Amazon and Google’s parent company Alphabet’s profits have increased, while Apple’s revenue has declined moderately due to weak iPhone sales.
The results showed that the total profit of these four companies was 38 billion U.S. dollars (approximately Rs 2,82,074), highlighting the strong economic strength of high-tech companies, which can better weather the global coronavirus pandemic than most companies.
But critics say they are too big and too powerful.
US authorities have filed an antitrust complaint against Google and are reportedly considering action against Facebook.
At the same time, lawmakers intensified their attacks on the way social media companies handle political content and “hate speech.”
Facebook CEO Mark Zuckerberg said on the earnings call: “Even the strongest liberal expressionist doesn’t think you should yell in a crowded theater.”
“Our policy also tries to balance freedom of speech and safety.”
Zuckerberg once again stated that when deciding what content should be allowed on social media, he was in favor of regulation, but worried that improper legislation would disrupt online platforms.
Zuckerberg said: “I am worried that some proposals, especially in the European Union, and the actions planned by Apple and other platform companies may have a meaningful negative impact on small businesses and the economic recovery in 2021 and beyond.”
Alphabet CEO Sundar Pichai said on the earnings call that the tech giant is confident that its platform’s popularity comes from providing valuable services, not from abusing market power.
Is the holiday shop early?
Due to strong retail sales and cloud computing growth, Amazon’s third-quarter profit tripled from a year ago, reaching $6.3 billion (approximately Rs 476.4 billion). The huge revenue of the technology and retail industry soared by 37% to US$96 billion (approximately Rs 7,12,824 crore).
In after-hours trading, Amazon stock fell by about one percent in after-hours trading, as the holiday quarter outlook was weaker than expected.
Neil Saunders of the research firm GlobalData said: “There is no doubt that Amazon’s latest results show that it is still the winner of the devastation caused by the pandemic.”
But Sanders said that due to increased competition from competitors, the growth rate is slower than in recent quarters, and that “Amazon’s wallet share has fallen.”
Amazon executives said they are increasing their distribution and delivery business, hoping to shine in the peak online shopping season at the end of the year.
The company recommends that those who intend to shop online during the holidays tend to reduce the pressure on the delivery business as early as possible.
Online advertising rebound
Although social media saw a rebound in the online advertising market, Facebook’s profit for the quarter increased by 29% to $7.8 billion (approximately 579.16 billion rupees), although how the company handled abusive content was also resisted by advertising.
As Facebook continues to benefit from the benefits of people who rely on the Internet to stay connected during the pandemic, revenue climbed to 21.2 billion U.S. dollars (approximately Rs 1,57,415 crore).
eMarketer analyst Debra Aho Williamson said: “Since the withdrawal of advertisers from the early pandemic, marketers have withdrawn advertising in all media to redo messaging or save money, and since the July advertising boycott, Facebook has achieved Nice rebound.”
She continued: “Despite the challenges of electoral turmoil and content control, it is still the first choice for advertisers.”
Alphabet, Google’s parent company, said its profits climbed to 11.2 billion U.S. dollars (approximately Rs 83,162 crore) in the most recent quarter, which was also driven by the rebound in digital advertising.
The company said that revenue from cloud computing products and its Google Play store for smartphones supported by its Android software also increased revenue for the quarter by 42% to US$46.2 billion (approximately Rs 3,43,125 crore). ).
Patrick Moorhead, an analyst at Moor Insights and Strategy, said: “Any political conspiracy has not changed.” “We were resisted by Facebook and conducted a lot of regulatory scrutiny on Google. Digital advertising is back.”
CFO Ruth Porat (Ruth Porat) said that blockbuster revenue in the quarter came from increased advertising spending on Google’s search engine and video streaming platform YouTube.
Is 5G slow?
Apple is the wealthiest member of the Quartet, with a market value of close to US$2 trillion (approximately Rs 1,48,53,900 crore), and its performance is disappointing.
According to earnings data, Apple’s profits fell by 7% to US$12.7 billion (approximately Rs 94,319 crore).
The total revenue of the tech giant rose slightly from last year’s level to US$64.7 billion (approximately Rs 4,80,510 crore) in this quarter, but revenue from iPhone sales (Apple’s main source of revenue) fell by approximately 20%, disturbing investors.
In the important Greater China market, Apple’s revenue fell by nearly 25% to US$7.9 billion (approximately Rs. 58,671 crore), and 5G functionality was a factor in the decision to purchase smartphones.
Apple has just launched its first 5G models in the new iPhone 12 series.
Apple Chief Executive Tim Cook said on the earnings call that the Chinese market was the most affected because there were no new iPhones in the quarter.
In after-hours trading, the company’s stock price fell more than 4%.
Cook said: “Apart from financial performance, I don’t think this year will be a time for each of us to look back with great liking or nostalgia.”
Is the iPhone 12 mini and HomePod mini the perfect Apple device in India? We discussed this on the weekly technical podcast Orbital, you can subscribe via Apple Podcast, Google Podcast or RSS, download the episode, or click the play button below.