The invincibility of US tech companies looked like it was under threat after Apple’s share price dipped below $400 yesterday, but search giant Google and software ogre Microsoft have not got their violins out. They have both reported rises in profit for the first three months of 2013. Google’s pre-tax profits rose 16% to £2.19bn, and Microsoft made $6bn profit in the same period, a 17% rise on the previous year.
So what’s been doing it for them? Well, Google puts its growth down to online advertising growth. Although, for an internet search company it was hardly going to be hot dogs, was it? Nonetheless, the firm said these revenues were $12.95bn in the first quarter of 2013, a 22% increase on first quarter 2012 revenues of $10.65bn.
Looks like poor economic conditions are no barrier to people opening their wallets for a bit of online spend. Chief executive Larry Page said something vague about ‘improving billions of people’s lives around the world’ by ‘working hard’ on Google’s products, but it was literally a one-liner and he didn’t address any of the individual success stories. Probably too distracted by the idea of having another go at human table football in the company’s ludicrously quirky offices.
Then there’s Microsoft. Its results are surprising given that its new operating system Windows 8 has been widely panned by critics because it is seen as tricky to use. The company decided to ditch the ‘Start Bar’ that has featured on every operating system it’s made since the ‘80s, in favour of a panel of ‘tiles’ containing the programmes you want as well as a bit of messaging and the time. And so on. But it has also had to try and combat a slump in PC sales since the advent of cheaper tablet PCs.
Nonetheless, cocksure as ever, CEO Steve Ballmer said: ‘The bold bets we made on cloud services are paying off as people increasingly choose Microsoft services including Office 365, Windows Azure, Xbox LIVE, and Skype. While there is still work to do, we are optimistic that the bets we’ve made on Windows devices position us well for the long-term.’ He’s neatly sidestepped the issue of crashing computer sales there, but to be fair, the Microsoft Surface looks like a reasonably competitor to the iPad and it has only been around for a few months, so it may yield some results yet.
It’s worth noting that where Apple will struggle to maintain sales because it has to keep selling new products, firms like Google and Microsoft provide more services and software, a sort of oil that consumer technology users have to keep relying on.
For the time being, though, Microsoft is pretty far behind on the mobile phone race. With Google’s Android and Apple’s iPhone, they’ve got smartphones sewn up for the time being...