Maybe we are seeing a shift. Apple and Facebook are consumer companies — business applications a niche within Apple. Microsoft is clearly a business to business or B2B company: and while the more celebrated parts of Amazon and Alphabet are consumer led, it is the B2B arms that are providing the fireworks. Maybe, in 2019, to claim the title world’s largest company, you need the tagline: ‘cloud operator’.
The latest results from Apple and Facebook are being portrayed as a triumph for Facebook and a disaster for Apple. Truth is, Facebook saw a nice jump in revenue and profits; but still faces big challenges. Apple more or less matched expectations, but then expectations were low: justifiably so, after-all, total sales were down five per cent, year on year.
Facebook did better than expected, but doubts linger over its eponymous brand: as analysts guess that revenue from WhatsApp and Instagram is becoming more important. Oculus Rift (who?) barely gets a mention these days.
Apple is suffering at the hands of a Chinese economy that is no longer the miracle economy. But of course, customer’s reluctance to upgrade every two years is not helping, nor is competition from Chinese companies such as Huawei and Xiaom.
But the share price shines a different perspective.
Since last October, shares in Apple are down by a third. Shares in Facebook are down by 31% since peak. Shares in Microsoft, by contrast, have merely fallen in line with wider market sentiment — down 8%. Amazon has lost 17%, Alphabet, 16% since its peak.
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None of this presents what one might call a sparkling performance: but then, very few share prices have done well of late.
But it is clear that Facebook, with a cloud made of privacy concerns, which not even Nick Clegg, the former British Deputy Prime Minister and now Facebook’s PR man (Vice-President for Global Affairs and Communications) can fix, and Apple, in a mist of confusion over where its next big thing will come from, are playing second fiddle to the three techs which happen to dominate the cloud business.
And since AI, deep learning, neural networks and all those other functions that recall the workings of our brain, tend to occupy space on the cloud, this is not something that is likely to change soon.
Meanwhile, rivals and privacy campaigners accuse Facebook of more spying; this time paying kids to monitor them. Facebook’s Mark Zuckerberg says that such accusations are “not at all aligned with the truth.” All innocent, with eyes wide open in incredulity, it compares its product for monitoring kids to old fashioned focus groups — just a way of finding out more about its customers. Presumably, that means the data it collects is anonymous. If so, one asks what the fuss is about? If not, then one really does have to question Facebook’s motives.
As for Apple, these days its growth derives from services — which did indeed see a 19% rise in sales — but even that includes cloud services, although not really of the B2B variety. But Apple, which likes to draw everyone’s attention to its self proclaimed halo concerning privacy, really does seem to be betwixt and between. The Apple watch is beginning to make inroads, but the combination of AI, with ever more sophisticated means to measure our health vitals via wearables and genome sequencing, could eventually create products which will be even more revolutionary than the iPhone once was.
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The Apple rumour mill has also churned out talk that the company is developing sophisticated 3D cameras to radically overhaul its augmented reality offering.
Augmented reality is a great idea waiting for the right technology.
If Apple can pull off the health/wearable/watch trick, whilst finally making augmented reality another killer app, it may just regain its crown as the world’s biggest company.
For now, though, in the ABC of the world’s biggest companies, Alphabet and Apple fight for third spot — with Apple, still a nose in front — but its a photo finish for the top slot.
The title world’s biggest company either belongs to a B2B player with a video games arm, or an online retailer, with a rapidly growing B2B arm propelling its growth.
For the time being at least, B2B rules. The title world’s biggest company belongs to either Microsoft or Amazon — with the title changing hands every few hours.
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