The business of the big tech companies shows enormous resilience in the coronavirus crisis. Amazon benefited massively from the online shopping boom in the past quarter, Apple surprised with a plus in the iPhone business. Online advertising is less rosy: Google recorded a drop in sales for the first time and Facebook grew much more slowly than usual. But everyone continued to make billions in profits and exceeded market expectations.
Amazon clearly stands out as the winner of the crisis from the other tech heavyweights. In the second quarter, sales rose 40 percent year-on-year to $ 88.9 billion (€ 75.1 billion), according to the world’s largest online retailer after the US market closed on Thursday. At $ 5.2 billion, the profit was roughly twice as high as a year earlier – even though Amazon spent $ 4 billion on corona measures such as protective equipment, cleaning and premiums in the quarter.
In addition to online trading, the cloud platform AWS also remained a lucrative business for Amazon, among other things because the increased work in the home office increases demand.
June best value for Apple
At Apple, iPhone sales rose 1.7 percent year over year to $ 26.4 billion. Analysts had only expected revenues of $ 21 billion. According to calculations by the analysis company IDC, Apple also managed to increase iPhone sales by a good 11 percent – while the smartphone market overall dropped by 16 percent. The new edition of the cheaper iPhone SE model played an important role.
Apple’s consolidated sales rose 11 percent to $ 59.7 billion in the past quarter. That was a record high for the June quarter. Profits grew twelve percent to $ 11.25 billion.
Facebook: user numbers are increasing, advertising revenue is falling
In the midst of the Corona crisis and a boycott of advertising customers in protest against hate speech on the platform, Facebook’s business is growing significantly more slowly than before. Last quarter, revenue increased 11 percent to $ 18.8 billion. There was similar growth in the first weeks of July. Before the crisis, growth rates of over 20 percent were the order of the day in Facebook’s business.
Facebook earns its money almost exclusively from advertising – and in the Corona crisis, many small businesses in particular place fewer ads. In July, more than 1000 advertisers, including heavyweights like Coca-Cola and the consumer goods giant Unilever, followed the boycott calls by civil rights groups and temporarily stopped their ads on the world’s largest online network.
At the same time, the number of users on Facebook continues to grow rapidly. Another 100 million monthly active users were added in the past quarter, now total 2.6 billion. 3.14 billion users accessed at least one Facebook product – the group also includes the Instagram photo platform and the WhatsApp chat service. That was an increase of 150 million within three months.
Google suffers from Corona more than the others
Meanwhile, Google’s parent company Alphabet was hit by higher costs and falling advertising revenue. Profits plummeted from $ 9.95 billion to $ 6.96 billion year on year. Alphabet’s money machine – Google’s advertising business – suffered in the crisis. For the first time in the company’s 22-year history, revenue decreased: eight percent to $ 29.9 billion. Alphabet CFO Ruth Porat, however, emphasized that the advertising business had recovered at the end of the quarter.
The four technology giants released their numbers the day after a US House of Representatives hearing at which MPs accused companies of abuse of market dominance and promised tougher regulation.