Big Tech Companies Flourished amid COVID, had a Blockbuster Pandemic Year

When the coronavirus led pandemic brutally destroyed the world economy and companies across the globe, the big tech companies flourished amid COVID that started in early months of 2020.  The global shift in habits helped the big tech companies Google Apple, Facebook, Amazon and Microsoft (GAFAM), earned unexpected revenues in the pandemic year, better than normal years. The Tech giants – Amazon and Apple posted record revenues with both companies topping $100 billion in quarterly revenue for the first time in the final quarter of 2020. These companies earned over $200K (Rs 1.5 crores)  to 800K (Rs 6 crores) per minute with a year-on-year profit growth in the range of 44% to 220% in Q1 of 2021.

Big tech companies flourished amid COVID in 2020

The COVID 19 pandemic started in early 2020 spread like wildfire infecting millions of humans across the globe and bringing the economic activities to a standstill as countries imposed tight restrictions to halt the movement of public to control the spread of the virus. It made a dent in the world economy with almost all of the major economies including India in negative growth zone.  Barring China, all major economies felt the massive negative impact of coronavirus pandemic. The first major impact was felt in the April-June quarter of 2020, except Chinese economy that grew by 3.2 per cent, all other major economies contracted as shown in figure 1.

By September 2020, every advanced economy had fallen to recession or depression, and all emerging economies were in recession. The world GDP contracted by 3.27% with almost all major economies standing in the red zone. And the future too seems to be gloomy with the World Bank suggesting that in some regions a full recovery won’t be achieved until 2025 or beyond.

But, when many companies collapsed partially or completely, the big technology companies flourished amid COVID and had a blockbuster pandemic year. These companies including GAFAM companies were able to generate huge revenues and profits in this pandemic. GAFAM is the abbreviation of Google, Amazon, Facebook, Apple and Microsoft. These Big Tech companies had a big year in 2020, as the coronavirus pandemic did not stop these companies from growing year on year basis as shown in figure 2.

The Tech giants Amazon and Apple posted record revenues with both companies topping $100 billion in quarterly revenue for the first time in the final quarter of 2020. Apple revenue crossed $100 billion for the first time in its history during the last quarter of 2020, up 21 percent year over year. iPhone sales reached ‘record’ $65.6 billion—the previous best was $61.58 billion, which Apple achieved in fiscal Q1, 2018.¹

After Apple, Amazon became the second big tech company to post its largest quarterly revenue of all time at $125.56 billion in October-December quater of 2020, as online shopping broke all records in this period amid the Covid-19 pandemic. Amazon’s full-year 2020 net sales were up 38 per cent, to $386.1 billion.²

Big tech companies flourished amid COVID in Q1 2021

The big tech companies continued growing more with an excellent start in 2021 with sound revenues and profits. CNBC, the US based news channel looked at the most recent quarterly earnings reports that five of the biggest brands in tech (Amazon, Apple, Alphabet, Microsoft, and Facebook) in recent weeks, and broke down how much revenue they each made for every minute of the first three months of 2021. (There were 90 days, and 129,600 minutes, in the first quarter of 2021). The big tech companies earned over $200,000 (Rs 1.5 cr) per minute to over $800,000 (Rs 6 cr) per minute in the first quarter of year 2021 as shown in Fig 3..

Amazon with a revenue of Rs 6 cr per minute was the leader in revenue generation per minute followed by Apple, Alphabet (Google), Microsoft and Facebook (Rs 1.5 cr per minute revenue).

1. Amazon: $837,330.25 revenue per minute ($109 bn revenue in first three months of 2021)
2. Apple: $691,234.57 per minute  ($90 bn revenue in first three months of 2021)      
3. Alphabet: $426,805.56 per minute ($55 bn revenue in first three months of 2021)
4. Microsoft: $321,805.56 per minute ($42 bn revenue in first three months of 2021)  
5. Facebook: $201,936.73 per minute  ($26 bn revenue in first three months of 2021)

In 2021′s first quarter, Amazon led the pack by pulling in $108.6 billion in revenue 220% jump in profit over previous Q1 of  year 2020. That breaks down to $837,330 per minute during that three-month period. Amazon topped $100 billion in revenue for the second quarter in a row as the pandemic forced people to do even more of their shopping online.

Apple followed Amazon in the breakdown of revenue-per-minute, pulling in $691,234 every minute of the first quarter of 2021. The company posted revenue of $89.6 billion for the quarter, with iPhone sales that grew by 65.5% from the same period a year earlier. The profit in this quarter was 110% over same period in previous year.

Google’s parent company, Alphabet pulled in $426,805 per minute, based on its reported total revenue of $55.3 billion for the first quarter of 2021. The profit in this quarter was 162% over same period in previous year.

Microsoft, reported $41.7 billion in quarterly revenue this past week, which broke down to $321,805 in revenue per minute. The profit in this quarter was 44% over same period in previous year.

Facebook pulled in $201,936 of revenue per minute with $26.2 billion in total revenue for the first quarter of the year 2021. The profit in this quarter was 94% over same period in previous year.

So friends, the pandemic has definitely boosted sales of tech companies as the world is getting more tech oriented. These tech companies would flourish more in future in the rapidly growing, hypersensitive digital world.

What do you say? Comment.

About the author

Dr. M.Rahman is a senior academician in the area of business management with an interest in digital marketing, CRM, Branding and Analytics. He has been teaching and training post graduate management graduates in various reputed management institutes in Delhi/NCR for over 15 years.

¹ (https://www.financialexpress.com/industry/technology/apple-revenue-crosses-100-billion-for-first-time-as-iphone-sales-soar-globally/2180406/)

² (https://www.thenewsminute.com/article/amazon-crosses-100b-quarterly-revenue-first-time-142701)