Three tech companies — Apple, Microsoft, and Google owner Alphabet — reported combined profits of more than $50 billion in the April-June quarter, underscoring their unparalleled influence and success at reshaping the way we live. Although these companies make their money in different ways, the results served as another reminder of the clout they wield and why government regulators are increasingly concerned about whether they have become too powerful. The massive profits pouring into each company also illustrated why they have a combined market value of $6.4 trillion — more than double their collective value when the COVID-19 pandemic started 16 months ago.
Apple’s first iPhone model capable of connecting to ultrafast 5G wireless networks continued to power significant increases in quarterly revenue and profits for tech’s most valuable company. With iPhone sales posting double-digit growth over the previous year for the third consecutive quarter, Apple’s profit and revenue for the April-June period easily exceeded analyst estimates. The Cupertino, California, company earned $21.7 billion, or $1.30 per share, nearly doubling profits made during the same period last year. Revenue surged 36% to $81.4 billion.
But in a Tuesday conference call with analysts, Apple CEO Tim Cook lamented that the steadily spreading delta variant of the coronavirus is casting doubt on how the rest of the year will unfold. “The road to recovery will be a winding one,” Cook said. That uncertainty has already led Apple to delay employees’ mass return to its offices from September to October. Most of Apple’s stores, though, are already open.
The iPhone 12, released last autumn, is shaping up to be Apple’s most popular model in several years, mainly because it’s the first to work on the 5G networks still being built worldwide. Apple’s iPhone sales totaled nearly $40 billion in the latest quarter, up 50% from a year ago.
Apple’s services division, the focal point of a high-profile trial revolving around the commissions it collects from iPhone apps, saw revenue climb 33% from last year to $17.5 billion. A potentially game-changing decision from the trial completed in May is expected later this summer.
Among Apple’s upcoming challenges is whether shortages of computer chips and other vital parts will force the company to delay its next iPhone this year, as it did last year. While Apple expects revenue to rise 10% in the current quarter, it may have more trouble getting parts for iPhones and iPad during the upcoming months. Executives skirted questions about another possible iPhone delay.