A few weeks ago, the preliminary report of the forecast of the financial results of the fourth quarter of 2022 of Microsoft was published. In the mentioned report, this company emphasized the game field and the successful performance of Surface series products. The income of the personal computer business of the Redmond technology giant has decreased slightly in the third quarter; But compared to the remarkable sales of these products during the Corona epidemic, it should be noted that most of the users who needed new Windows laptops have made their purchases and do not need to order new models for now.
In the following, we will take a closer look at the comparison of Microsoft with the company’s big competitors, i.e. Google, Apple and Amazon.
Apple; Hardware superhero
As you know, Apple’s business model revolves entirely around significant profit margins from iPhone sales; But this company tries to provide more diverse services to its customers. Sales of the App Store, Apple Music, and Apple TV are increasing, and the Mac is becoming a more powerful competitor to PCs due to Apple’s huge investments in proprietary chips.
According to forecasts, Apple’s profit and revenue in the final quarter of 2022 will be $20.7 billion and $90.1 billion, respectively, which is almost double the revenue forecast for Microsoft ($50.1 billion) in this time frame; Of course, Microsoft’s profit is expected to reach $17.6 billion in the final quarter of 2022.
Google; Alphabet of advertising
WindowsCentral He writes that Google’s business still completely revolves around online advertising; The sector that brought the quarterly income of 69 billion dollars to Armaghan, of course, a large part of this income was obtained through the YouTube platform. YouTube Premium subscriptions and other revenue streams of the Internet search giant also seem to have performed well in the recent quarter. Google’s cloud service revenue has also reached 6.8 billion dollars. For comparison, Microsoft’s revenue from Azure and Microsoft 365 cloud services reaches more than 36 billion dollars.
Amazon; The lowest profit margin
Amazon offers a variety of services and is the dominant brand of online retail in the world. This company, with an income of 53 billion dollars from the online sales sector alone, has continued to witness the growth of its revenue generation. Amazon’s advertising and cloud services business have also experienced revenue-generating growth; But the company’s overall profit was only $2.9 billion, which means the online retail giant’s operating profit margin is a paltry 2 percent, the lowest among the world’s tech giants.
Amazon’s massive operations will undoubtedly be affected by the macroeconomic environment; Because energy costs are rising and inflation is putting a lot of pressure on wages. Amazon is potentially the most vulnerable company among these four world technology giants; Because according to the record of the world economy, many customers have removed some goods from their shopping carts. Of course, Amazon’s sales during periods like Black Friday and Prime Day will certainly increase significantly.
Microsoft; The king of cloud services
Microsoft’s business increasingly revolves around cloud services, and its Intelligent Cloud division, with revenues of $20.3 billion, is in tough competition with Amazon’s cloud services ($20.5 billion). It seems quite possible that Microsoft’s focus on cloud services could help the company overtake Amazon’s AWS in the future, at least in terms of revenue. This is despite the fact that the AWS service has completely dominated the cloud services market in the last decade.
Microsoft has advised shareholders that its Azure business may face a revenue decline in the next quarter due to fears of a global record. What is important here is that the Redmond-based technology giant has the highest operating profit margin (35%) among the four mentioned companies in this period of time.
Microsoft is well-positioned to help the company weather the macroeconomic headwinds. The computer games department has always shown that even in spite of the recession, it has brought good performance and revenue generation for this company. Because even in the worst economic conditions, gamers tend to pay for new games and gaming equipment. Microsoft’s investment in PC entertainment and the affordable Xbox S series console could help improve the company’s gaming revenue.
Also, the biggest decline in sales for Microsoft is probably related to the brand’s personal computer division. The Corona epidemic caused users and employees to buy new computers to do their work at home; But that era is over. The constant flow of sales of personal computers last year can indicate the drop in sales of these products in the next year as well; Because most of the users have already bought the desired systems; Therefore, they do not need to order new models.
In any case, the infographics presented in this article provide a very detailed view of the performance of Microsoft’s various businesses compared to the company’s major competitors. In the last few years, technology companies have grown at a very fast pace, partly due to the telecommuting and work-from-home culture.