The largest US technology companies are thriving in a pandemic that has increased dependence on their products and services, while hammering much of the rest of the US economy.
Quarterly results from Apple Inc, Amazon.com Inc, Facebook Inc and Alphabet Inc on Thursday showed that the industry is capitalizing on the crisis as locked-down consumers use tech gadgets and the Internet for entertainment, social connection, shopping, learning and work.
Together, the four companies reported revenue of US$206 billion and net income of US$29 billion in the three months ending in late June.
“Right now, it’s big tech’s world and everyone else is paying rent,” Wedbush Securities Inc analyst Dan Ives said. “They are consumer staples now and this crisis has bought their growth forward by about two years.”
The four companies’ results hit a day after their leaders faced the US Congress in a hearing over whether they have broken antitrust rules and need to be reined in.
Apple executives were quick to recognize how their strong results contrasted with an economic collapse that has caused millions of job losses, hundreds of thousands of deaths and many bankruptcies.
Earlier on Thursday, US government officials reported that the country’s GDP contracted by the most on record — 32.9 percent on an annualized basis — and 17 million Americans claimed state unemployment benefits in mid-July.
“We’re conscious of the fact that these results stand in stark relief during a time of real economic adversity for businesses, large and small, and certainly for families,” Apple chief executive officer Tim Cook said on a conference call. “We do not have a zero-sum approach to prosperity, and especially in times like this, we are focused on growing the pie, making sure our success isn’t just our success.”
Cook cut back on his usual litany of praise for his company’s quarterly performance and instead devoted much of his scripted time on the call to discussing things like a contact-tracing partnership with Google, the deployment of masks and the design of a face shield for medical workers.
However, the numbers paint a clear picture.
IPad and Mac sales surged on demand from people working and studying from home.
The Mac had its second-strongest quarter ever, while the iPad had its best June quarter in eight years, Cook told Bloomberg TV.
Apple said that it plans to launch its next iPhones a “few weeks later” than usual, adding that the new models might come out in October rather than September.
Apple chief financial officer Luca Maestri made the disclosure during the company’s earnings call on Thursday.
Amazon posted a record quarterly profit as people avoiding physical stores shopped online. Unit sales at the largest online retailer surged 57 percent, the fastest pace of growth since the company began breaking out that metric.
“The penetration of e-commerce is accelerating,” Neuberger Berman Inc senior analyst Hari Srinivasan said.
Amazon executives, in the earnings release and on conference calls with analysts and the media, did not go out of their way to tout the company’s record sales and profit. Instead, they highlighted the company’s hiring during the pandemic, as well as investments in employee safety.
A day after testifying to Congress about Amazon’s sometimes harsh treatment of small merchants, CEO Jeff Bezos said in a statement that such sellers saw faster growth than Amazon’s own retail operation.
Facebook reported better-than-expected results partly because so many small and medium businesses are moving online right now to survive, chief operating officer Sheryl Sandberg said.
“A lot of businesses are struggling, but at the same time businesses have to pivot online,” she added. “We become a place you can set up a Web site, set up a digital storefront.”
The firm reported that it has more than 9 million advertisers and 180 million small businesses that use the free parts of its service, such as a Facebook or Instagram profile.
Facebook CEO Mark Zuckerberg picked up where he left off at Wednesday’s antitrust hearing, referring to the tech industry as an “American success story,” but he also took aim at US President Donald Trump for the second time this month.
“It is incredibly disappointing because it seems like the US could have avoided this current surge in cases if our government had handled this better,” Zuckerberg said.
Alphabet’s Google was the only big tech company on Thursday to report a notable impact from the pandemic. Revenue fell for the first time as advertisers spent less. The company is heavily exposed to the travel and retail industries.
Still, other parts of Google’s business performed well. Sales at Google’s cloud business jumped 43 percent, while YouTube ad revenue rose 6 percent as more people watched online videos at home.
Google CEO Sundar Pichai played down concern about a regulatory crackdown on Google, which is facing an imminent antitrust case from the US Department of Justice.
“We’ve obviously been operating under scrutiny for a while,” he said. “We realize, at our scale, that’s appropriate.”
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