Image source: Rey Rodriguez, iwonder TV - Shutterstock
What's going on?
Amazon and Apple bucked the Big Tech trend with better-than-expected results late on Thursday.
What does this mean?
Amazon’s cloud business brought in 33% more revenue than the same time last year, while its ecommerce segment – boosted by more efficient deliveries and the success of its Prime memberships – ticked along nicely too. And with the company’s expectation-beating revenue looking all the more impressive next to its rivals’ bleak results, investors could breathe a sigh of relief: they initially sent its shares up 12%.
Not to be outdone, Apple posted higher-than-expected iPhone sales shortly afterward, while also noting that the number of active Apple devices is now at an all-time high. And since that’s given the company more opportunity to tempt users with the likes of Apple Music and Apple TV+, its highly profitable services segment continued to grow quickly last quarter. Investors were just glad to go out with a bang, sending the company’s shares up 4%.
Why should I care?
The bigger picture: Amazon sends in the heavies.
Amazon isn’t resting on its laurels, announcing this week that it’ll be upping the price of Amazon Prime by an average of 31% across Europe. That’s a hike that won’t cost Amazon a penny to roll out, meaning it’s essentially free money if customers don’t abandon the service. Amazon, for its part, is confident that won’t happen, not least because it did the same thing in the US in February without much downside. Of course, inflation has only risen since then, and lighter wallets might lead to a different result this time around…
Zooming out: Apple tries to woo China.
Meanwhile, Apple is focusing on improving sales in a lockdown-bruised China, where it rolled out discounts on iPhones and related products this week. The tech giant is notoriously reluctant to slash prices on its products, but it seems it’s willing to make compromises until the world’s biggest smartphone market gets back up and running.
Originally posted as part of the Finimize daily email.
The top 2 financial news stories in 3 minutes. Join over one million Finimizers