---
title: "Apple, Alphabet and Amazon hurt as economic slump crimps demand"
description: "Apple, Amazon.com and Alphabet, technology bellwethers with a combined market value approaching $5-trillion, posted results on Thursday that show an economic slowdown is throttling demand for electronics, e-commerce, cloud computing and digital advertising – mainstays of the global tech economy."
type: "NewsArticle"
publisher: "Daily Maverick"
site: "https://www.dailymaverick.co.za"
section: "Business Maverick"
author: "Bloomberg"
author_url: "https://www.dailymaverick.co.za/author/bloomberg/"
canonical_url: "https://www.dailymaverick.co.za/article/2023-02-03-apple-alphabet-and-amazon-hurt-as-economic-slump-crimps-demand/"
published: "2023-02-03T05:53:59"
lang: "en-ZA"
word_count: 515
---

# Apple, Alphabet and Amazon hurt as economic slump crimps demand

> Apple, Amazon.com and Alphabet, technology bellwethers with a combined market value approaching $5-trillion, posted results on Thursday that show an economic slowdown is throttling demand for electronics, e-commerce, cloud computing and digital advertising – mainstays of the global tech economy.

By Bloomberg · Published 3 February 2023, 07:53 SAST

## Key points
- Apple, Amazon and Alphabet each reported quarterly results that fell short of analysts' expectations, reflecting the global economic slowdown caused by the pandemic. Apple was hit hardest by consumers reducing their frequency of purchasing iPhones and Macs due to weak consumer sentiment. Amazon's revenue was trimmed by slowing growth in its cloud computing business, while Google's ad sales suffered a blow from customers curtailing orders. To combat the slump, all three companies have announced cost-cutting measures such as layoffs and hiring freezes, as well as a focus on artificial intelligence research for Alphabet. Despite share prices falling after-hours, executives remain optimistic about the future with Covid lockdowns easing in key markets.
- Apple's sales fell more than analysts predicted in the holiday quarter, due to slack purchases of iPhones and Macs.
- Amazon's revenue was trimmed by soft consumer demand for products sold online and slowing growth in a once-booming business.
- Alphabet's results missed Wall Street estimates after customers curtailed orders for ads that appear alongside online search results.
- All three companies are looking to move past the slump through cost cutting, layoffs and AI-driven leaps.

## Content

Apple’s [sales](https://www.bloomberg.com/news/articles/2023-02-02/apple-sales-miss-estimates-in-face-of-supply-snags-slow-economy) fell more than analysts predicted during the holiday quarter, slammed by slack purchases of iPhones and Macs. Amazon’s [revenue was trimmed](https://www.bloomberg.com/news/articles/2023-02-02/amazon-reports-robust-sales-quieting-fears-over-slower-growth) by soft consumer demand for products sold online and slowing growth in a once-booming business that provides remote computing power to companies. Alphabet’s [results](https://www.bloomberg.com/news/articles/2023-02-02/google-shares-gain-as-revenue-meets-analyst-estimates) missed Wall Street estimates after customers curtailed orders for ads that appear alongside online search results.

“The war in Ukraine, inflationary pressures, economic uncertainty and macroeconomic headwinds kept the consumer sentiment weak in 2022 while smartphone users reduced the frequency of their purchases,” Harmeet Singh Walia, a senior analyst at Counterpoint Research, wrote in a report on Apple.

Economic weakness also affected business demand for ads and cloud computing, said Mandeep Singh, technology lead at Bloomberg Intelligence. The sluggish economy was most evident at Alphabet “as they called out advertisers pulling back, echoing what other ad vendors have said”, he said in an interview. “Cloud consumption is coming down, though growth rates are still higher there.”

Shares of all three companies slipped in after-hours trading, with Amazon falling 6.6% and Alphabet losing 6.4%. Apple slid as much as 5.6%. Nasdaq 100 futures were also lower, indicating a possible reversal of the Thursday rally led by Meta Platforms, whose [results](https://www.bloomberg.com/news/articles/2023-02-01/meta-revenue-beats-expectations-as-facebook-keeps-growing) emphasised cost cuts and tens of billions of dollars in share buybacks.

Each of the big tech companies reporting on Thursday also underscored the ways they’re working to move past the slump. Alphabet CEO Sundar Pichai leaned heavily into artificial intelligence as a way to improve search results and other products. Starting this year, DeepMind, a division focused on AI research, will be included in Alphabet’s corporate costs. That will show how the technology is being incorporated into other businesses – rather than just Alphabet’s “Other Bets” division – the company said.

“I’m excited by the AI-driven leaps we’re about to unveil in search and beyond,” Pichai said in a statement.

Part of Apple’s weakness last quarter was the result of supply-chain constraints, particularly in China, where Covid-related lockdowns impeded production while also keeping consumers out of stores. Apple CEO Tim Cook said a loosening of Covid rules in China – one Apple’s biggest markets – is helping brighten his outlook.

“When you look at the opening that started happening in December, we saw a marked change in traffic in our stores as compared to November – and that followed through to demand as well,” Cook said on a conference call with analysts. Production “is now back where we want it to be”, he also said.

Amazon CEO Andy Jassy zeroed in on the company’s efforts to slash costs, reversing the massive ramp-up in hiring and spending prompted by the boom in online commerce that accompanied the pandemic.

“I think probably the No 1 priority that I spend time on with the team is reducing our costs to serve in our operations network,” Jassy told analysts on a call.

Alphabet CFO Ruth Porat also told investors that the company will “meaningfully” slow the pace of hiring this year. Both companies have also announced major layoffs in recent weeks.**BM/DM**