Apple and Amazon see revenue hikes in face of economic turmoil

In the midst of a global cost of living crisis both Amazon and Apple beat expectations, with revenue for iPhone sales up 3% to $40.7 billion and Amazon clocking a 7% YoY revenue jump to $121.1 billion.

Apple today announced its Q3 quarterly results, which clocked a 2% YoY jump in revenue to $83 billion, though net income was down 11% to $19.4 billion. The revenue is apparently a new fiscal Q3 record, and seems to have exceeded expectations according to reports.

Apple has its fingers in lots of pies as all big tech firms do, however its chief driver of cash remains the ever popular iPhone. Going by the economic pressure felt by many economies currently, driven by the continued fallout of covid, the Russian invasion of Ukraine, and supply chain shortages, you might expect sales of the iPhone, which has always represented the higher end of the smartphone market, to take a hit during the last quarter. However sales have remained strong for the segment and actually rose 3%, raking in Apple a very healthy $40.7 billion.

“There is no obvious evidence in our data that there is macroeconomic effect on iPhone sales,” CEO Tim Cook said as reported by the WSJ. “On iPad and Mac, frankly, we didn’t have enough data from a supply point of view to really test the demand.”

Luca Maestri, Apple’s CFO added bullishly: “Our June quarter results continued to demonstrate our ability to manage our business effectively despite the challenging operating environment. We set a June quarter revenue record and our installed base of active devices reached an all-time high in every geographic segment and product category. During the quarter, we generated nearly $23 billion in operating cash flow, returned over $28 billion to our shareholders, and continued to invest in our long-term growth plans.”

In a quarter that has seen many other tech firms get a bloody nose (such as Intel, who just posted a Q2 revenue drop of 22%), Amazon has also done a decent job of keeping the till ringing, to say the least, with its Q2 results clocking in at 7% YoY revenue jump to $121.1 billion. Amazon’s cloud division AWS seems to be offering a lot of the ballast, clocking $19.7 billion in sales compared to $14.8 billion YoY, which reportedly beat expectations in itself.

It wasn’t fireworks across the board however – operating income decreased to $3.3 billion in the second quarter compared with $7.7 billion YoY, and net loss was $2 billion compared with net income of $7.8 billion YoY.

“Despite continued inflationary pressures in fuel, energy, and transportation costs, we’re making progress on the more controllable costs we referenced last quarter, particularly improving the productivity of our fulfillment network,” said Andy Jassy, Amazon CEO. “We’re also seeing revenue accelerate as we continue to make Prime even better for members, both investing in faster shipping speeds, and adding unique benefits such as free delivery from Grubhub for a year, exclusive access to NFL Thursday Night Football games starting September 15, and releasing the highly anticipated series The Lord of the Rings: The Rings of Power on September 2.”

It’s been reported that Apple shares rose by more than 3% in after-hours trading, while Amazon shares were reportedly up by more than 12%. During a cost of living crisis, households across the world are making hard choices on what they spend their cash on, and any subsequent cut backs will of course end up effecting the revenues of consumer facing companies. However it seems for now, one thing people are reluctant to give up is their iPhone’s or the myriad services provided by Amazon.

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