Neil Cybart 10/27/23 Neil Cybart 10/27/23

Alphabet FY3Q23 Earnings, Microsoft FY1Q24 Earnings

Hello everyone. We conclude this week’s updates with Alphabet’s and Microsoft’s earnings.

Next week is shaping up to be a busy one with an Apple event on Monday evening followed by earnings a few days later. The current plan is to prepare for Apple’s earnings on Monday with the discussion possibly being continued on Wednesday. Let’s jump into today’s update.

Alphabet FY3Q23 Earnings

Alphabet’s earnings were fine with revenue up 11%. While that growth rate is up from the 6% reported last year, the difference is due to FX no longer being a headwind. Gross margins were up 300 basis points year over year. Operating income was up 25%. Free cash flow was $23B (which benefited from tax payment deferrals).

Diving deeper into the results, Google Search led the way with $4.5B revenue growth contribution (59% of total revenue growth). Revenue for Google – other, which includes everything from YouTube Premium and YouTube TV subscription revenue to Pixel, was up $1.4B (18% of the total), roughly the same as Google Cloud. YouTube proper (advertising) was up $0.9B.

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Neil Cybart 5/19/19 Neil Cybart 5/19/19

Above Avalon Podcast Episode 147: A Faster Bumper Car

In episode 147, we take a look at the changing competitive landscape facing the giants (Amazon, Apple, Facebook, Google, and Microsoft). Comparing the situation to bumper cars, we discuss why Google and Facebook have the slower cars that are no longer able to hide within the traffic. Additional topics include deep dives into three competitive battles in particular: Apple vs. Google, Apple vs. Facebook, and Amazon vs. Facebook vs. Google.

To listen to episode 147, go here.

The complete Above Avalon podcast episode archive is available here.

Neil Cybart 6/3/11 Neil Cybart 6/3/11

Snapshots

While surfing the web this morning, I could only laugh at the amount of optimism given to Windows 8. Posts on how Windows 8 will truly revolutionize Microsoft (they said the same thing about Windows 7) were the cherry on top. Commenters rushed in with Microsoft support throwing around such figures as 350 million Windows 7 licenses sold to date or some other funny math that supports their claims. If I wanted to live like it was still 2004, I could go along with these individuals and drink the Microsoft kool-aid, but its time to wake up.

People are making a fundamental error. Rather than looking at tech trends, many are looking at snapshots of the current technology landscape and then extrapolating what they see into the future. Snapshots do nothing but reinforce the dying status quo.

June 2011 technology snapshots would show:

1) Nokia is still selling plenty of phones.

2) Microsoft is crushing it with Windows 7 licenses.

3) Research in Motion is still selling a boatload of blackberries.

All snapshots; singular moments in time that won’t show:

1) Mac sales are gaining market share every quarter and will soon surpass 15% of the consumer computer market.

2) iOS is becoming ever-more vibrant as a growing number of developers are now earning a honest living from iOS app revenue.

3) iPad power.

4) Android is largely becoming the non-Apple destination for anything mobile.

While Windows 8 may have its attractive points, interesting features don’t change consumer technology trends. Instead, years of successful product launches and value-added services help turn a loyal consumer base into an army of brand enthusiasts. The tech industry is still in the early stages of working through the death of a monopoly. Industries take years, if not decades, to work though such an industry-changing event. Certain brands are dying a slow death, while at the same time, being replaced by up and coming brands. Taking snapshots will never give the true picture.