NYT News ServiceThe already bonkers dollars of Big Tech have become even bonkers-er.
My colleagues and I have written a lot about the unreal sales, profits and oomph of America’s five technology titans: Apple, Microsoft, Google, Amazon and Facebook. This might feel like old news. Tech’s Titanic 5 have been big and rich for a long time, and they have gotten even more so as people and organisations have needed their products during the coronavirus pandemic. Yadda, yadda, yadda. We get it.
But no, we really do not get it. America’s technology superstars have launched into a completely different stratosphere than even other wildly successful companies in tech and beyond.
Let me give you a flavour of the bonkers-ness:
I know that lots of odd things are happening in the US economy right now. But I cannot adequately explain how not-normal these numbers are from the tech superpowers. Maybe that is why Bezos wanted to touch outer space; the Big 5 tech giants have outgrown Earth.
What is clear more than ever is that America’s tech titans have formed a separate universe in which they are the sun, and everyone else—billions of humans, other companies, entire countries and governments—are mere planets that revolve around them.
Perhaps even more surprising than the size and scale of these companies is how they have mostly grown more profitable in what could or should have been economic conditions that hurt their profits.
I have been befuddled that Amazon and Apple have shown higher profit margins than those companies have had for years—possibly ever. That has happened even though the pandemic has forced those companies to reorganize factories or warehouses, deal with disrupted global shipping, scramble for parts in short supply and spend a fortune to keep their workers safe.
That chaos and unplanned spending should have made the companies less profitable, not more so. (Apple did spook investors a little by saying this week that it was having trouble getting all the parts it needs for the next few months.)
What does all this mean? Well, for one thing, members of Congress or state attorneys general might look at the numbers and ask if, as the Big Tech companies say, they face stiff competition and could die at any moment, how could profit margins keep going up like this?
Logic would suggest that if the companies are fighting off lots of rivals, they might have to cut prices, and profit margins would shrink. So how does Facebook turn each dollar of revenue, nearly all from ads it sells, into 43 cents of profit — a level that most companies can only dream of, and higher than Facebook posted before the pandemic?
I have asked over and over in this newsletter whether America’s Big 5 tech titans are invincible. As the gap keeps widening between the superrich tech superstars and the merely super, I am starting to believe that the answer is yes.
This article originally appeared in The New York Times .
My colleagues and I have written a lot about the unreal sales, profits and oomph of America’s five technology titans: Apple, Microsoft, Google, Amazon and Facebook. This might feel like old news. Tech’s Titanic 5 have been big and rich for a long time, and they have gotten even more so as people and organisations have needed their products during the coronavirus pandemic. Yadda, yadda, yadda. We get it.
But no, we really do not get it. America’s technology superstars have launched into a completely different stratosphere than even other wildly successful companies in tech and beyond.
Let me give you a flavour of the bonkers-ness:
I know that lots of odd things are happening in the US economy right now. But I cannot adequately explain how not-normal these numbers are from the tech superpowers. Maybe that is why Bezos wanted to touch outer space; the Big 5 tech giants have outgrown Earth.
What is clear more than ever is that America’s tech titans have formed a separate universe in which they are the sun, and everyone else—billions of humans, other companies, entire countries and governments—are mere planets that revolve around them.
Perhaps even more surprising than the size and scale of these companies is how they have mostly grown more profitable in what could or should have been economic conditions that hurt their profits.
I have been befuddled that Amazon and Apple have shown higher profit margins than those companies have had for years—possibly ever. That has happened even though the pandemic has forced those companies to reorganize factories or warehouses, deal with disrupted global shipping, scramble for parts in short supply and spend a fortune to keep their workers safe.
That chaos and unplanned spending should have made the companies less profitable, not more so. (Apple did spook investors a little by saying this week that it was having trouble getting all the parts it needs for the next few months.)
What does all this mean? Well, for one thing, members of Congress or state attorneys general might look at the numbers and ask if, as the Big Tech companies say, they face stiff competition and could die at any moment, how could profit margins keep going up like this?
Logic would suggest that if the companies are fighting off lots of rivals, they might have to cut prices, and profit margins would shrink. So how does Facebook turn each dollar of revenue, nearly all from ads it sells, into 43 cents of profit — a level that most companies can only dream of, and higher than Facebook posted before the pandemic?
I have asked over and over in this newsletter whether America’s Big 5 tech titans are invincible. As the gap keeps widening between the superrich tech superstars and the merely super, I am starting to believe that the answer is yes.
This article originally appeared in The New York Times .