Counting the Cost

The rise of the tech titans

A look at the tech giants’ earnings as they are positioning themselves for greater influence over our digital lives.

Nearly every Internet consumer in the world is exposed to these technology giants in some way: Amazon, Alphabet, Apple, Microsoft and Facebook. The latest set of quarterly earnings shows just how much profit they’re generating from our increasingly technology-focused economy.

In 2017, the biggest tech companies are just as big as Wall Street banks as they grow their market dominance. These companies own giant ecosystems of products that all tie into each other.

Every time Apple sells an iPhone, the customer buys other services. Apple’s cash hoard is $250bn – which is bigger than the market capitalisation of General Electric. It became the world’s most valuable company back in 2011.

Companies can't just rest on their laurels and hope to continue to perform with the products and services they have.

by Jack Kent, director of operators and mobile media, IHS

Alphabet’s market value is worth $607bn. It’s the parent company of Google which runs two-thirds of all searches in the United States.

Amazon’s just introduced the Echo smart speaker to encourage customers to buy more of its services and products. The world’s biggest online retailer just marked an eighth straight quarter without losses and has a market capitalisation of nearly $439bn.

Facebook’s latest figures revealed that it has 1.9 billion users worldwide and it expects to hit the two billion mark soon. It reported a 76.6 percent surge in quarterly profit on Wednesday driven by mobile ad sales.

Jack Kent, director of operators and mobile media for the IHS Technology group, joins Counting the Cost to discuss the top five tech giants’ earnings.

“One of the most interesting things in these results is the nature of how expansive some of these ecosystems are, so while Apple’s iPhone results got a lot of the headlines with relatively flat performance there, interestingly, its services business grew in app-store sales and app-store subscriptions. So, it’s the variety of services that these companies offer which is really an interesting trend now,” explains Kent.

He believes that these giant companies will continue to innovate and a big part of their profits will continue to be allocated for research and development.

“Companies can’t just rest on their laurels and hope to continue to perform with the products and services they have, so you see lots of investment in new technologies – things like augmented reality and artificial intelligence, so they really position themselves for future growth as well.”

Also on this episode of Counting the Cost:

US retail apocalypse: Is it real and what happens next, if as analysts say, the US mall sector is facing extinction? US retailers are going out of business. Some analysts are calling the rise in bankruptcy rates a retail apocalypse. Others say we’re witnessing a paradigm shift within the industry. One of the oldest US brands, Sears, has also warned that it may have to close. Tom Ackerman reports from Maryland.

Speaking to CTC is Gary Mortimer, associate professor of advertising, marketing and public relations at Queensland University of Technology in Brisbane, Australia.

‘Inclusive growth’ for Africa: The World Economic Forum on Africa was hosted by South Africa this year. The focus was on how to achieve “inclusive growth” for the continent through responsible leadership. But the host country’s President Jacob Zuma is facing pressure over his reported ties to the rich. Mohamed Vall reports from Durban.

Made in China: The first large Chinese-made passenger jet has taken off on its maiden flight, a key milestone for a country seeking a place in the global aviation market. The C919 single-aisle jet, which can hold up to 168 passengers, soared over Pudong International Airport in the commercial hub Shanghai as a crowd of thousands cheered.

Canada maple syrup: Maple syrup is Canada‘s economic and cultural mainstay. Quebec province produces 80 percent of what’s consumed around the world, largely through a strict system of quotas and price controls. But as Daniel Lak reports from Oka near Montreal some farmers who want to opt out are facing huge fines.