Amazon and Apple both posted lower-than-expected financial results yesterday but, Amazon’s advertising revenues jumped, as did Apple’s services earnings — both potential bright spots for marketers and advertisers.
The online retailer and iPhone manufacturer are the latest in a line of tech giants posting slightly lacklustre results. Microsoft, Google parent company Alphabet, Meta, and Snap, in particular, all took a hammering from the markets as advertising revenues slowed and the cost of living starts to bite for consumers.
Amazon’s overall revenue topped out at just under $197 billion, slightly lower than the $197.52 it had predicted. However, the company’s advertising revenue hit $14.8 billion, exceeding the $14.69 target it had predicted.
“In the past four months, employees across our consumer businesses have worked relentlessly to put together compelling Prime Member Deal Events with our eighth annual Prime Day and the brand new Prime Early Access Sale in early October. The customer response to both events was quite positive, and it’s clear that particularly during these uncertain economic times, customers appreciate Amazon’s continued focus on value and convenience,” said Andy Jassy, Amazon CEO.
“We’re also encouraged by the steady progress we’re making on lowering costs in our stores fulfilment network, and have a set of initiatives that we’re methodically working through that we believe will yield a stronger cost structure for the business moving forward. There is obviously a lot happening in the macroeconomic environment, and we’ll balance our investments to be more streamlined without compromising our key long-term, strategic bets. What won’t change is our maniacal focus on the customer experience, and we feel confident that we’re ready to deliver a great experience for customers this holiday shopping season.”
That “maniacal focus” led Amazon to premiere new series on Amazon Prime Video including The Lord of The Rings: The Rings of Power, which attracted 25 million global viewers on its first day. It has also brought the NFL’s Thursday Night Football, to Prime Video, along with the new seasons of sport to Europe with UEFA Champions League soccer in Germany and Italy, Ligue 1 soccer in France, and exclusive coverage of US Open tennis in the UK.
Apple missed the targets on its iPhone, iPad, and other products (such as AirPods and the Apple Watch). However, sales of all were up year-on-year.
The California-based company saw its services business, such as Apple TV+ and Apple Music, miss its target by almost $1.5 billion but revenue was still up 4.98 per cent year-on-year.
The company did raise prices on Apple Music and Apple TV+ but, CEO Tim Cook said the price increases were “disconnected” from Apple’s services performance.
“If you look at the price increases as an example, Music, the licensing cost has increased,” Cook said.
He also said that as Apple TV+ has more shows now, the company feels that the product is more valuable.
