These are strange times for Big Tech. Technology companies are setting record sales and profitability while implementing massive layoffs as they figure out what’s next in computing. AI and mixed reality hold a lot of promise, but development is expensive and there are no guarantees. Mainstream companies, on the other hand, don’t stop rising and falling just because something cool is on the horizon. The result is a fluidity mixed with ambition, elation, and confusion.
Alphabet, Amazon, Meta, Microsoft, and Apple all reported earnings this week, and the numbers provided a glimpse into what’s true and what’s not. So, for the first time, and probably not the last in this ambiguous moment, let’s take a look at some of the big tech myths and facts for February 2024.
Myth: Vision Pro will make sense for Apple in the near to medium term
When Tim Cook talks about Vision Pro, he feels like he sees God in it. On Thursday, he called it “a revolutionary device built on decades of Apple innovation” and said it is years ahead of its competitors. Apple had revenue of $119.58 billion in its most recent quarter, but according to Morgan Stanley, Vision Pro’s revenue is expected to reach up to $4 billion by 2027. Despite the initial hype, it won’t be until 2030, or even later, that this device approaches a mature mass-market version. Vision Pro could end up being a money-losing albatross for Apple, just like Reality Labs has been working on with Meta. Apple is certainly hoping for short-term results, but the real bet is that Vision Pro will pay off in the future.
Fact: Apple has a China problem
Apple is betting big on China, with about 20% of iPhone sales coming from China. However, the adoption of Chinese phones in the region is hurting Apple’s business and could be a major obstacle to its future growth. Apple’s sales in Greater China fell nearly 13% last quarter, making it the only region where sales declined. The company also broke a record of four consecutive quarters of declining sales, although guidance suggested sales would contract again next quarter. In the world he is not ideal for the second most valuable listed company.
Fact: Google’s culture prevents it.
Google executives were uncharacteristically candid when they spoke to analysts this week about their company’s culture. Explaining Google’s recent job cuts, Google President Ruth Porat revealed that the intention was not specifically to improve profit margins, but to accelerate the company’s culture. “We talked a lot this quarter about organizational efficiency and structure, and we’re focused on removing layers to simplify execution and increase speed,” she said. Told. In non-technical terms, this means that Google’s management recognizes that the company is moving too slowly and is cutting back on managers who are believed to have entrenched that slowness.
Myth: The digital advertising business is struggling
Meta increased ad revenue by $7 billion this quarter. This number alone is enough to put us in the top 10 annual advertising businesses in the world. Alphabet grew its advertising business by $6 billion in the quarter, and that growth alone makes it the 11th largest advertising business outside of China. Meanwhile, Amazon grew its advertising business by about 25% last year, to $47 billion in revenue. These statistics come from Madison & Wall, a company run by superstar advertising analysts.
Brian Wieser suggests that the digital advertising market is experiencing explosive growth. There is no slowing down here.
Fact: AI is already big business
Microsoft currently has 53,000 customers using Azure AI services to train and run AI models. Adding services for existing customers is another matter, but the company says a third of his 53,000 customers have used Azure for the first time in the past year. This sales growth shows that more and more developers are building with AI and paying big bucks for it. Microsoft’s cloud revenue grew 24% overall in 2023.
The post Big Tech Myths and Facts: Vision Pro, Google Culture, Digital Ad Market Edition first appeared on TheWrap.