Alphabet (Google parent company), Amazon, Apple, and Facebook posted a combined $206 billion in revenues, adding a cumulative $29 billion to their bottom lines in last quarter. That is massively astonishing when you consider that the world is largely broken. The BIG Four are huge forces across markets, and are clearly dominant. The result: close to 40% of the S&P. I do think Amazon will hit $2 trillion in market cap by June 2021. China powered Apple results, with regional revenues topping $9.3 billion with record iPad sales, Fortune reported.
Looking at this plot, you will notice something: only tech – big or small – is doing great. Others like financial services, healthcare, etc have huge activities but they are not capturing the financial values. Yes, we are in the midst of a pandemic, with healthcare companies at the forefront. But the fact is evident: they are not capturing value and are merely creating opportunities for technology companies which power the world.
Thursday was dominated by the numbers, the left-brain analysis that showed how at least three of the big four are faring in the world’s darkest times. In a word: well. Amazon, Apple, and Facebook surged in the second quarter, each for their own reasons.
Amazon’s cloud business soared, and it bore fruit from its investments in delivery, satisfying sheltered-in-place customers. Apple sold a little bit of everything, including, not that surprisingly, Mac computers. The word computer used to be in Apple’s name and for the last decade it has been a slow-growth annuity for the iPhone maker. Homebound workers need computers. Facebook proved that users and advertisers aren’t that interested in how much the company harms democracy and decency. For now.
Only Google’s numbers gave reason for pause, as advertising revenue declined. Google’s ad business is so big that it’s probably the best proxy for the economy of its cohort. That it didn’t grow in a quarter when parts of the global economy were improving bodes ill
(Fortune newsletter)
In the video below, I explain.
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The Big Tech is operating on another level, nothing concerns them with losses, theirs is whether they made more profit this year or last one, while the rest of us can go on hibernating…
Apple is an interesting case, especially in its hardware performances. In the midst of lockdown and WFH redesign, you might think that the likes of HP and Lenovo would gain weight in the laptop market, but again, big organisations would rather equip their employees with Mac Series and iPad, in the end, remote work would benefit Apple more…
What is clear is that dealing on ‘essential’ products doesn’t mean you would be wealthy, even when you serve a billion customers. This is largely because many things that fall under essentials are commoditized, so a lot of players are there, destroying margins of course. You would expect food companies and broad healthcare sector to be number one right now, yet all of them seem to be working for the tech guys.
Apple has proven that there’s more value in focusing on premium customers who pay for luxury, that’s where the greatest value is locked in. Mass market will give the noise, but not the bucks.
Being very busy doesn’t mean you are capturing value, you must go for the market that really matters.
to be sincere the big 4 have harnessed the power of unreasonable logic, I believe this is and should be the goal of every business that wants to remain relevant as the world changes. what I mean by unreasonable logic, is when people buy or use a product not just because of it function or price, but by their perception of the brand. people would rather buy an Apple laptop instead of an HP, not because of the price, beauty, quality but rather because of their personal perception of the brand or product. they are two ways you rise in business it is either by margin (profit) or magnitude (customers) the big 4 have combine both this principles, what we have today is the result. Nigerians and africa needs to learn from thier playbook, and tweak it properly in function to the peculiar environment of Nigeria and Africa unstable governmental and monetary policies. we must serve Africa, capture value before we can capture the world
I went through the LinkedIn pages of top executives and Directors of Big Tech companies and found something in common, they were all having the status of “We are hiring” – now that speaks volumes of their talent acquisition rare and in extension expected business value creation.
Unfortunately, I did not find some for top executives in the healthcare space! Healthcare business is so closed and lacking in real exponential disruption in business innovation that I am not surprised to hear that they might leave behind “5 billion people by 2030” in access to healthcare. Just going by the slow disruption in their business models.
It is a new world indeed – a new order across all levels.