Amazon and Apple plagued by supply and chip issues
Amazon and Apple on Thursday reported billions of dollars in quarterly profits on Thursday, but supply chain bottlenecks and the great chip shortage have rocked the tech giants, which have experienced a boom fueled by the pandemic.
Apple said sales of its iconic iPhones and iPads were held back due to supply constraints, while Amazon struggled to secure products and enough workers to meet demand.
Both companies have skyrocketed in the pandemic era as people relied on their products and services, but now the ripple effects that have emerged like lack of computer chips and labor costs croissants cast a shadow.
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Amazon said Thursday that its profit in the last quarter fell to $ 3.2 billion as the pandemic, hirings and product shortages pushed costs up.
The e-commerce colossus said its sales reached $ 110.8 billion, but its profits were about half of its net profit compared to the same quarter last year.
“We have always said that when we are faced with the choice between optimizing short term profits versus what is best for long term customers, we will choose the latter,” said Andy Jassy, Managing Director of ‘Amazon, in a post explaining that the company had to spend more to do its job.
Apple said Thursday that its profit in the last quarter jumped on massive revenues that are still below analysts’ expectations.
The iPhone maker said its net income of $ 20.5 billion came from revenue of $ 83.4 billion, a record for its quarter ending in September.
The semiconductor drought – caused by a mix of factors, including increased demand from the Covid-19 pandemic and trade tensions between the United States and China – has affected industries around the world, from tech giants to automakers.
Apple CEO Tim Cook said on an earnings call that part of the supply problem was the chip shortage, while there were also Covid-related manufacturing disruptions in Asia from South East.
“It affects pretty much all of our products,” he said.
The results came after scandal-hit Microsoft, parent company of Google, Alphabet and Facebook posted huge profits this week, although Twitter reported a large loss due to a shareholder lawsuit settlement. .
Big Tech is under close scrutiny from antitrust regulators, especially Apple, which has appealed a major US court ruling that would force the iPhone maker to loosen its grip on its market. online applications.
But the pandemic, which has returned to center stage in the United States with the wave of Delta variants, has driven demand for online services.
In Amazon’s case, a growing number of consumers have turned to its platform for everything from tofu to toilet paper, and its cloud computing division has also grown to help businesses and consumers stay connected.
Earlier in the week, Alphabet reported quarterly revenue of $ 65.1 billion that eclipsed the same period last year by around 41% as the online advertising engine and cloud services of the company helped generate a profit of $ 18.9 billion.
The Colossus of Silicon Valley remains a centerpiece of online business, with offerings such as its search engine, advertising marketplace and YouTube video platform giving it vast global influence.
Google’s results came the same day Microsoft announced a quarterly profit increase fueled by demand for cloud computing, saying it made $ 20.5 billion in profit as revenue jumped 22%. .
Facebook’s strong financial figures coincide with the main social network struggling with a new crisis since former employee Frances Haugen disclosed reams of internal research showing executives were aware of the potential for harm from their sites.
The platform announced that its third-quarter profit reached $ 9.2 billion, an increase of 17%, and its user count rose to 2.91 billion.
Twitter posted a loss in the quarter on Tuesday, however, fueled by the settlement of more than $ 800 million in a lawsuit alleging investors were misled about slowing user growth on the platform.