Big Tech’s ascension is in full flow. Between them, Apple, Microsoft and Alphabet reported close to $190bn in revenues and $57bn in profit in the past quarter, billions of dollars more than forecast. Yet while Microsoft and Alphabet shares rose in after-hours trading, Apple’s fell. The dip is unnecessarily negative.
“Progress made is not progress guaranteed,” warned Apple boss Tim Cook. Fair enough. But the trends that led Apple to double net income to $21.7bn in the last quarter are long term. The company was forced to close physical stores during the pandemic and delayed the release of its latest smartphone model, the 5G-enabled iPhone 12. It is still facing supply chain problems. Yet demand has not flagged.
The hype around next-generation 5G connection speeds has failed to set the world alight. Luckily for Apple, millions of iPhone users held off upgrading their handset for years and are making the switch anyway. iPhone sales rose 50 per cent to slightly less than $40bn in the April-June quarter. According to data analytics group Kantar, two-thirds of people planning to buy a new smartphone are looking for a 5G model and want to stick with brands they know. That bodes well for the upcoming iPhone 13.