Weak Google, Microsoft Profit Fanatic Recession Fears; iPhone 14 production faces supply constraints in India

Weak Google, Microsoft Profit Fanatic Recession Fears;  iPhone 14 production faces supply constraints in India
Fears of a recession and a slowing economy are becoming more real than ever, particularly in Western nations. The latest quarterly earnings from Big Tech companies Alphabet and Microsoft are indicative of the bleak outlook for the short to medium term. Advertising revenue, one of the biggest contributors to the bottom line for many tech companies, is also drying up as marketers adjust their finances amid the inflationary environment.


Also in this letter:
■ iPhone 14 production faces supply constraints in India: Rajeev Chandrasekhar
■ Twitter loses most active users, suggests internal documents
■ Regulating digital platforms is ICC’s great challenge: outgoing president

Slow revenue growth at big tech firms portends impending recession

istock recession

Microsoft Corp published its slowest quarterly revenue growth in five years on Tuesday as difficult macroeconomic conditions hit PC sales and slowed cloud growth, which had boosted its earnings for years.

The company reported revenue of $50.12 billion for the July-September quarter, up 11% year-on-year and slightly above analyst expectations of $49.61 billion, according to Refinitiv IBES data.

google-parent Alphabet Inc missed market estimates for quarterly revenue on Tuesday, when advertisers cut spending in the face of the economic slowdown.

Smoother orientation: “The Street fears softer guidance from Nadella and that is contributing to weakness after hours,” Wedbush Securities analyst Daniel Ives said, referring to CEO Satya Nadella’s earnings call.

“The PC market was worse than we expected in the first quarter,” Brett Iversen, head of investor relations at Microsoft, told Reuters.

Cut advertising costs: Google’s advertising revenue was $54.48 billion in the third quarter, compared to $53.13 billion a year ago. The company said total revenue stood at $69.09 billion in the quarter ended September 30, compared with $65.12 billion a year earlier.

The online advertising market has been hit globally by fears that consumers may cut back on spending as they grapple with rising interest rates and runaway inflation, prompting companies like Snap Inc to issue a revenue growth warning.

Music streaming platform Spotify posted a 24.7% gross margin in the September quarter, which fell short of its own guidance. The company also found “slower-than-expected ad growth given the challenging macro environment.”

“This is an early indicator of concerns that companies have about the economy,” Spotify CEO Daniel Ek told the Reuters news agency.

Apple iPhone 14 Production Faces Supply Constraints In India: Rajeev Chandrasekhar


Minister of State for Electronics and Information Technologies (IT) Rajeev Chandrasekhar said Wednesday that he has held talks with iPhone maker Apple. regarding the shortage of the iPhone 14 Pro in India.

The minister was responding to a tweet that mentioned a shortage of iPhone Pro and iPhone Pro Max models in Delhi-NCR.

Between quotation marks: “Spoke to Apple and they told me that while iPhone 14 demand is also being met by Indian production, iPhone 14 Pro demand has increased and faces supply constraints which they are addressing,” he tweeted.

He also said that private sales of these two models are likely “alternative” supply channels.

Apple in India: Apple started making iPhones in India in 2017. This year, iPhone sales in India nearly doubled in the June quarter compared to the previous year.

In September, the credit rating agency moody said The manufacturing of the iPhone 14 in India within weeks of the global launch demonstrates the maturity of Apple’s manufacturing capabilities in the country.

The race picks up pace: The race to make iPhones in India has intensified over the past six months with big names like vedanta Y dads entering the fray.

Recently, Vedanta announced that it would establish a center to manufacture iPhones and television equipment in Maharashtra. The mining giant will take a 60% stake in the joint venture, while Taiwanese chipmaker Foxconn will own the remaining 40%.

Meanwhile, the Tata group is also in talks with Taiwanese electronics giant Wistron to set up a joint venture.

Regulating digital platforms is the great challenge of CCI: outgoing president


Regulation of digital platforms will be a key challenge for India’s antitrust regulator going forwardsaid Ashok Kumar Gupta, outgoing chairman of the Competition Commission of India (CCI).

In fast-moving digital markets, lengthy litigation and delayed interventions could prove “costly or even pointless”, he said, defending the need for CCI to take preventative action through ‘ex-ante’ regulations to address competition concerns. .

From the horse’s mouth: “Their (digital platforms’) control over critical digital infrastructure and their power to set rules and determine access terms makes them de facto ‘gatekeepers’ of online marketplaces,” he said.

“Such rule-setting power, control over user data and user interface, helps maintain and strengthen the platforms’ long-term market position in core platform markets, while also expanding into adjacent markets,” Gupta said, highlighting related competition. concerns.

He said the resulting irreparable adverse consequences for competition and consumer welfare warrant effective regulatory scrutiny of the big digital platforms.

Evaluation of the steps: After incurring two heavy fines from the Competition Commission of India (CCI) in two weeks for abusing its dominant market position, tech giant Google said on Wednesday it was committed to its users and developers and was reviewing the decision to assess next steps.

The Indian regulator in Google was fined Rs 936 crore on Tuesday for engaging in anti-competitive practices in three cases brought against the internet giant. Last week, the competition watchdog had penalized Google Rs 1,337.76 crore for abusing its dominant position in the market.

Also read | ETtech Explained: Why CCI has penalized Google again with Rs 936 crore fine

Twitter is losing its most active users, internal documents show

Twitter is losing its most active users, internal documents show

twitter is struggling to keep its users more activethat are vital to their business, they pledged, underlining a challenge facing Tesla Inc Chief Executive Elon Musk as the deadline to close his $44 billion deal to buy the company nears.

Twitter’s internal research suggests that “heavy tweeters” make up less than 10% of overall monthly users, but generate 90% of all tweets and half of global revenue.

Heavy Tweeters Going Light: A “heavy tweeter” is defined as someone who logs into Twitter six or seven days a week and tweets about three or four times a week, according to an internal document titled “Where Did the Tweeters Go?”

The research further suggests that heavy tweeters have been in “absolute decline” since the pandemic began.

Changing interests: The research also found a shift in interests over the past two years among Twitter’s most active English-speaking users, which could make the platform less attractive to advertisers.

The report found that cryptocurrencies and “not safe for work” (NSFW) content, including nudity and pornography, are the fastest growing topics of interest among English-speaking heavy users.

Also read | Elon Musk may close a Twitter deal by Friday: report


Small tech companies, startups give moonlighting the green light

More IT companies can follow Infosys into moonlighting

Even as top-tier IT services companies worry about moonlighting, mid-tier tech companies and tech startups like Zoho, Kissflow, and M2P Fintech are holding open discussions with employees to build trust among moonlighters to reveal side projects and reset expectations, according to a report in The Times of India.

However, these firms have made it clear that the practice is acceptable as long as the company’s intellectual property is not compromised.

Taking the initiative: API infrastructure startup M2P Fintech said moonlighting is a reality among the developer community today. The company has openly discussed the issue with employees and has clarified its position.

“We need to consider the needs of people trying to work on startup ideas or projects that are not directly related to the IP created here, and allow them to pursue these ideas while having a steady salary,” said Prabhu Rangarajan, Co-Founder and COO of M2P Fintech.

What is brewing? Some startups are working to adjust employment contracts to accommodate employee needs working on non-competing startup ideas while holding full-time positions with the company. Others are launching specific programs to hire and accommodate moonlighters.

Kissflow founder and CEO Suresh Sambandam said the company discussed the issue with employees at a town hall and urged them to assess the nature of their side jobs.

M2P is working to start an internal ideas group where employees can share ideas from start-ups and explore a product fit for the market.

Today’s ETtech Top 5 newsletter was hosted by Gaurab Dasgupta in New Delhi and Siddharth Sharma in Bangalore. Graphics and illustrations by Rahul Awasthi.

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