With the likes of Apple, eBay and Facebook revealing their financial results this week, Sara Hemrajani reports on what’s impacting the tech sector.
Analysts assess week of tech results
The world’s top tech companies opened their books this week — giving analysts plenty to think about.
Apple shocked Wall Street with its forecast of an iPhone sales drop.
Potential weaknesses in the company’s star product reflect wider concerns about market saturation and a cooling global economy.
Online retailer eBay also disappointed with declining revenue as its shoppers turned to alternatives which offer faster delivery times.
Both businesses highlight the industry’s reliance on constant innovation, says Commerzbank’s Peter Dixon.
SOUNDBITE: Peter Dixon, Global Financial Economist, Commerzbank, saying (English):
“Product innovation, which has sustained the likes of Apple over the course of recent years, may have run its course to some extent. So I think there will be greater headwinds for the tech sector over the course of – certainly this year – and I think maybe we need to see some new impetus on the product cycle before we can talk about the next leg up.”
One area continuing to impress – cloud services.
While investors disapprove of Amazon’s low margins and high operating costs, cloud services are proving to be its silver lining.
And computer giant Microsoft beat expectations — its cloud division kept momentum going even as PC demand slides.
David Moth is from Econsultancy.
SOUNDBITE: David Moth, technology expert, Econsultancy, saying (English):
“It’s moving to this subscription model so people buy access to these products. And they can access them on any device, wherever they are, so it means that it’s much more flexible for businesses and for people.”
Another big money-spinner — mobile advertising.
Facebook posted quarterly profit of one billion dollars.
That’s largely thanks to a jump in mobile ad spending on the social network.
Facebook says a billion-and-a-half users log on to at least once a month.
A customer base too large to ignore.