WEBVTT - Google, Apple, Amazon Report Earnings 0:00:13.039 --> 0:00:15.520 And Caroline hired up Blougs World headquarters in New York, 0:00:15.880 --> 0:00:19.160 and I made Lovelow in San Francisco. This is Bloomberg Technology. 0:00:19.239 --> 0:00:23.400 Three giants of global technology, Caroline three very disappointing earnings 0:00:23.440 --> 0:00:26.200 reports and will that put an end to quite the 0:00:26.280 --> 0:00:28.320 run up in tech stocks that we've been seeing. Ed, 0:00:28.400 --> 0:00:31.000 let's get to it. The juggernaut that is Apple. It 0:00:31.080 --> 0:00:35.720 reports its first revenue declines fully short, almost across the 0:00:35.760 --> 0:00:39.840 board product wise, plus the rally stores. As Caroline said 0:00:39.880 --> 0:00:43.280 in after hours, with Alphabet feeling the slowdown in ad spend, 0:00:43.320 --> 0:00:47.360 we speak to the CFO and Amazon projects lackluster sales 0:00:47.400 --> 0:00:51.440 and slower cloud unit growth shares. They're also falling after hours. 0:00:51.640 --> 0:00:54.080 Let's get straight back to Apple and bringing Julia Arsk, 0:00:54.280 --> 0:00:57.240 principal analysts at Forrester Research. You look at the numbers, 0:00:57.400 --> 0:01:00.960 the sort of more deep weak this in that holiday 0:01:01.040 --> 0:01:04.160 quarter for Apple. Perhaps it was that some new products 0:01:04.160 --> 0:01:06.520 weren't released until the new year. What was your takeaway 0:01:06.520 --> 0:01:10.600 from the print? So my takeaway was is, you know, 0:01:10.640 --> 0:01:13.400 I'm not a financial analyst, but are certainly our expect 0:01:13.440 --> 0:01:16.240 Tachens is that sales would be lower. If we look 0:01:16.240 --> 0:01:19.199 at our data from consumers. We have seventy one percent 0:01:19.280 --> 0:01:21.880 of consumers today in the United States that are concerned 0:01:21.880 --> 0:01:24.520 about the general state of the economy. Those numbers are 0:01:24.560 --> 0:01:27.319 even higher in Europe. We have thirty eight percent of 0:01:27.360 --> 0:01:31.200 consumers who are cutting back spending on non essential goods. 0:01:31.680 --> 0:01:33.840 And while we did have a holiday forecast that was 0:01:33.920 --> 0:01:38.319 up in the United States six point one one, a 0:01:38.319 --> 0:01:41.720 lot of that was still fueled by inflation. So all 0:01:42.000 --> 0:01:43.640 you know, savings rates are down. There's a lot of 0:01:43.680 --> 0:01:46.840 economic concerns that consumers have today. So that's that's one 0:01:46.840 --> 0:01:50.280 of the factors that's impacting the near term. And talk 0:01:50.360 --> 0:01:55.280 to us about whether really this is a focus on 0:01:55.440 --> 0:01:59.320 services that will eventually bear fruit in that respect overall 0:01:59.360 --> 0:02:02.360 g because we have despite some of the misses that 0:02:02.400 --> 0:02:05.680 we're seeing compared to analyst expectations. The CEO, Tim Cook, 0:02:05.760 --> 0:02:08.600 the CFO really trying to talk about the strength and resilience, 0:02:08.639 --> 0:02:11.480 the amount of two billion products in people's hands, the 0:02:11.520 --> 0:02:14.720 fact that services a record revenue rate. Is that something 0:02:14.720 --> 0:02:18.400 to be optimistic about. I think it's there's act absolutely 0:02:18.440 --> 0:02:20.960 it's something need to be optimistic about because one of 0:02:20.960 --> 0:02:23.680 the other long term factors we haven't talked about is 0:02:23.760 --> 0:02:27.760 very intentionally Apple, like other smartphone manufacturers, right, these smartphones 0:02:27.800 --> 0:02:31.200 is their number one source of revenue, are intentionally building 0:02:31.200 --> 0:02:34.160 devices that consumers can keep for longer. Right, There's more 0:02:34.200 --> 0:02:37.800 focus on sustainability, There's more focus on a consumer's right 0:02:37.880 --> 0:02:41.600 to repair the device, their supporting devices for longer periods 0:02:41.639 --> 0:02:45.000 of time. So as we focus on some of these 0:02:45.120 --> 0:02:47.920 environmental factors, as we look into the future, consumers are 0:02:47.960 --> 0:02:51.000 going to have also slower upgrade times. So Apple will 0:02:51.040 --> 0:02:53.720 have to look to building out an ecosystem and products 0:02:53.760 --> 0:02:56.840 and being more focused on their services revenue, which granted 0:02:56.919 --> 0:02:59.160 is a smaller proportion of their overall revenue, but certainly 0:02:59.240 --> 0:03:02.280 their highest margin business. Julie, I want to go back 0:03:02.280 --> 0:03:05.359 to this idea of new products and timing. Right, we 0:03:05.520 --> 0:03:07.600 write in our Bloomberg News story that it's a tough 0:03:07.639 --> 0:03:11.560 comparison because in the holiday quarter of one, Apple would 0:03:11.560 --> 0:03:13.800 come out with a new line of MacBooks. They didn't 0:03:13.880 --> 0:03:17.440 do that in two. How how dependent is Apple and 0:03:17.520 --> 0:03:20.920 churning out generation off the generation of new hardware to 0:03:21.080 --> 0:03:25.040 drive that sales growth, to drive the interest Absolutely they 0:03:25.040 --> 0:03:28.680 are we I mean, I look not only looking at 0:03:28.760 --> 0:03:31.079 let's say the MacBook cycle, whether it's a tablet cycle, 0:03:31.120 --> 0:03:34.239 and most importantly the smartphone cycle, weren't in every six 0:03:34.320 --> 0:03:36.760 months of one of their largest competitors, which is Samsung, 0:03:36.800 --> 0:03:39.800 which had which you know, rolled out a news device yesterday. 0:03:40.000 --> 0:03:43.280 But literally they need to have the next, latest and 0:03:43.360 --> 0:03:46.920 greatest thing every year with every one of these product 0:03:46.960 --> 0:03:50.960 lines because they've got really stiff competition coming from other geographies. 0:03:51.360 --> 0:03:54.880 And Apple has a very strong focus on this profitability. 0:03:55.120 --> 0:03:57.120 It doesn't have as big of a product line as 0:03:57.160 --> 0:03:59.280 some of its competitors can do, where they may be 0:03:59.360 --> 0:04:02.880 able to sell devices, uh not the same profit margins 0:04:02.920 --> 0:04:05.680 or any profit at all. So absolutely, you know, you 0:04:05.680 --> 0:04:07.880 look at factors like R and D and bringing people 0:04:07.880 --> 0:04:10.160 back to the office and innovation like all of that 0:04:10.320 --> 0:04:14.120 is key. Absolutely, product releases, new product releases, not only 0:04:14.200 --> 0:04:16.440 keeping up but like leap frogging ahead of the competition 0:04:16.480 --> 0:04:18.800 with every one of these products is critical. And Urine 0:04:18.800 --> 0:04:20.919 and you're out, and it's critical to be able to 0:04:20.960 --> 0:04:23.200 make these products. Julie, and I know you're much more 0:04:23.240 --> 0:04:26.400 focused on the consumer trends, the demand trends, rather than 0:04:26.440 --> 0:04:28.640 say that my new shives supply chain over in China, 0:04:28.680 --> 0:04:30.559 but supply chain has been a real headache for Apple, 0:04:30.720 --> 0:04:33.440 particularly in the last quarter. We look at actually some 0:04:33.480 --> 0:04:37.840 of their supply chain suffering after hours Skyworks TSMC down 0:04:38.040 --> 0:04:39.880 and they've been down over the year and they're certainly 0:04:39.880 --> 0:04:43.279 falling after hours as well. From your perspective, are you 0:04:43.360 --> 0:04:45.800 hoping this is a company that can remain diversified to 0:04:45.800 --> 0:04:47.880 be able to make the product at the right run 0:04:47.960 --> 0:04:51.279 rate and get it into the hands that can customer. Yeah. 0:04:51.360 --> 0:04:53.840 I think, you know, if you read through the quarter 0:04:53.839 --> 0:04:55.960 of the reports and our reports, I think Apple has 0:04:55.960 --> 0:04:57.760 a very good hand on the risk factors that are 0:04:57.760 --> 0:05:00.240 in place, and I think everything to to you know, 0:05:00.240 --> 0:05:02.240 trusting what Tim Cook is saying. Everything he's saying is 0:05:02.240 --> 0:05:04.919 about diversifying the supply chain and lowering the risk of 0:05:05.000 --> 0:05:07.680 being dependent on you know, one country in one geography 0:05:07.800 --> 0:05:10.320 for so many critical components to go into their core devices. 0:05:10.360 --> 0:05:13.520 I think absolutely it's important. We want to thank you 0:05:13.600 --> 0:05:17.680 for us to research Principal analyst Julie Arsk fascinating across 0:05:17.720 --> 0:05:19.840 the board in terms of all things Apple, and we've 0:05:19.839 --> 0:05:21.760 got to make the pivot now because there were so 0:05:21.800 --> 0:05:24.600 many key names and Daniel Newman is going to join 0:05:24.680 --> 0:05:26.760 us now to dig in to the world of Alphabet 0:05:26.800 --> 0:05:29.880 principal analyst over it for true and Research and just 0:05:30.680 --> 0:05:33.080 we had a conversation this CFI let ed dig into 0:05:33.080 --> 0:05:35.520 that because he really spoke to with poor your initial 0:05:35.560 --> 0:05:38.680 takeaway on Alphabet, the worries about perhaps cloud growth and 0:05:38.839 --> 0:05:43.000 really though trying to talk up their AI prows, right, Yeah, 0:05:43.000 --> 0:05:45.600 I think there was mrs really across the board. And 0:05:45.640 --> 0:05:48.640 this is an adjusted down guided silver lining though, Caroline 0:05:48.720 --> 0:05:51.920 is I believe the fan wants to see things break 0:05:52.040 --> 0:05:54.600 and so if we like that devish talk for the market, 0:05:54.720 --> 0:05:57.160 we need to first see big companies that have been 0:05:57.279 --> 0:05:59.760 running pretty successfully even through this downturn over the last 0:05:59.839 --> 0:06:03.479 year or start to miss And so that's the silver lining. Um, 0:06:03.560 --> 0:06:06.919 the AI talk is a massive consideration right now. You 0:06:06.960 --> 0:06:09.120 can absolutely tell that Google is going to have to 0:06:09.160 --> 0:06:11.120 lean in to deal with what Microsoft is doing with 0:06:11.160 --> 0:06:16.479 its open AI commitment. UM, the cloud business, the advertising business, UM, 0:06:16.520 --> 0:06:19.880 every part of the company is at risk if they 0:06:19.880 --> 0:06:24.200 don't figure out a way to combat what Microsoft is doing. 0:06:24.520 --> 0:06:26.720 So this is definitely gonna be part and you saw 0:06:26.760 --> 0:06:28.919 that they even have new reporting that they're planning to 0:06:28.960 --> 0:06:32.640 start in their new uh the reports coming up around 0:06:32.640 --> 0:06:35.000 AI to give more clarity to their investors about how 0:06:35.000 --> 0:06:38.200 that is is transpiring. So it was a tough quarter 0:06:38.480 --> 0:06:40.440 for all these big tech names. But like I said, 0:06:40.440 --> 0:06:42.120 I think the silver lining is in the fact that 0:06:42.200 --> 0:06:44.599 starting to miss is the indication that we really have 0:06:44.880 --> 0:06:49.200 maybe hit this bottoming period that people have been waiting for. Dan. 0:06:49.279 --> 0:06:50.920 We're grateful to have you on the program and get 0:06:50.920 --> 0:06:52.919 this quick reaction. As Karenine said, I've been on the 0:06:52.920 --> 0:06:56.280 phone with CFO Reef Parratt, and you know she framed 0:06:56.279 --> 0:06:59.800 this pretty quick, quickly and clearly, this is a reset. 0:06:59.839 --> 0:07:02.880 We are committed to re engineering our cost base to 0:07:03.080 --> 0:07:05.680 long term profitable growth. That was kind of her response 0:07:05.960 --> 0:07:08.760 to the layoffs. Are you convinced by that? Is this 0:07:08.920 --> 0:07:11.680 alphabet basically saying, Okay, this is the year of discipline. 0:07:12.960 --> 0:07:15.160 I think this is a theme across tech. I think 0:07:15.160 --> 0:07:17.200 these reduction and forces in layoffs. I think it's in 0:07:17.240 --> 0:07:19.800 a moment where all the companies are taking to reset. 0:07:20.040 --> 0:07:22.440 I think throughout the pandemic, we hired uh, the tech 0:07:22.440 --> 0:07:25.320 industry hired to aggressively. I think it was trying to 0:07:25.360 --> 0:07:28.080 meet that rapid onset of demand and a lot of 0:07:28.120 --> 0:07:31.080 the digital transformation projects that we heard companies were doing. 0:07:31.080 --> 0:07:34.920 We're really more bodies being thrown at growth and revenue 0:07:34.920 --> 0:07:38.440 and demand. The spiked UH during the pandemic. So now 0:07:38.480 --> 0:07:40.960 companies are looking at some of those uh those hires 0:07:41.000 --> 0:07:43.360 they had to make it way over market values. They're 0:07:43.360 --> 0:07:45.440 trying to reset some of those and trying to get 0:07:45.480 --> 0:07:48.600 back to a more favorable outfact situation, which as we've seen, 0:07:48.640 --> 0:07:50.840 as companies have announced reduction in forces and laots, the 0:07:50.840 --> 0:07:54.480 markets actually favoring these decisions because these are getting back 0:07:54.520 --> 0:07:57.920 to the roots of running these businesses. And so I 0:07:57.960 --> 0:07:59.920 see this as a moment. Is it enough? I mean, 0:08:00.240 --> 0:08:03.120 the size of Google is still significantly larger than it 0:08:03.200 --> 0:08:05.720 was a year ago, even after twelve and that's the 0:08:05.760 --> 0:08:07.320 case of most of these tech comes. So they are 0:08:07.320 --> 0:08:09.800 reducing enforced, but there's still larger than they were a 0:08:09.880 --> 0:08:11.920 year ago, as many of them did a lot of hiring. 0:08:12.120 --> 0:08:14.760 So it's a start. But if the next quarter doesn't 0:08:14.760 --> 0:08:17.440 look good, I would expect to see more. All right, Yeah, 0:08:17.480 --> 0:08:19.800 Alphabet confirming it will book a charge of one point 0:08:19.880 --> 0:08:22.440 nine billions two point three billion dollars as a result 0:08:22.680 --> 0:08:25.280 of those layoffs. I guess the fighting talk was about AI, 0:08:25.360 --> 0:08:27.480 and I think we knew this was coming right Dan, 0:08:27.600 --> 0:08:31.000 that executives would be quizzed on AI. What Roofport told 0:08:31.000 --> 0:08:34.400 me was basically a flex. It was basically defense saying 0:08:34.440 --> 0:08:36.920 we've been working on AI for a long time. We're 0:08:36.920 --> 0:08:41.559 excited about momentum as, breakthroughs coming from their research team, 0:08:41.600 --> 0:08:44.560 like in language models, generative AI. A big emphasis on 0:08:44.640 --> 0:08:47.680 research because for Alphabet it's not yet out there in 0:08:47.720 --> 0:08:50.520 the real world. Do you expect Alphabet to become a 0:08:50.600 --> 0:08:55.720 real commercialized AI player this year? I think anything that 0:08:55.800 --> 0:08:57.440 was behind the curtain is going to have to start 0:08:57.440 --> 0:09:00.800 to become more exposed. I think the p A commitment, 0:09:00.800 --> 0:09:04.440 I think chat, GPTs popularity and the general concerns to 0:09:04.520 --> 0:09:07.319 what this can mean for search for instance, or workspaces 0:09:07.800 --> 0:09:10.120 is going to force Google and Alphabet to start to 0:09:10.160 --> 0:09:12.920 reveal all of the research it's done. Now. To be clear, 0:09:13.080 --> 0:09:17.479 as you know, technology industry analysts, we are continuously impressed 0:09:17.520 --> 0:09:20.200 by what Google is capable of in the AI space. 0:09:20.280 --> 0:09:23.600 They've been inventive, they've been innovative, but they haven't necessarily 0:09:23.640 --> 0:09:26.320 done a great job of coming out in front recently 0:09:26.360 --> 0:09:30.640 and explaining how they plan to combat what others are doing, 0:09:30.760 --> 0:09:32.440 and in the case of the open Ai came on 0:09:32.600 --> 0:09:36.439 very quickly, Microsoft's large commitment and investment, and now Google 0:09:36.520 --> 0:09:38.439 is in a situation where they have to be able 0:09:38.480 --> 0:09:40.560 to show the market, yes, we have a plan, we 0:09:40.640 --> 0:09:43.560 have technology. We are not going to let a chat 0:09:43.640 --> 0:09:46.840 bot or what open eye is doing significantly disrupt our 0:09:46.880 --> 0:09:50.800 advertising business. Uh. And that's that's what the market's gonna 0:09:50.800 --> 0:09:52.680 want to hear, is that there isn't a big risk 0:09:52.800 --> 0:09:55.400 to that part of the business that's so critical to 0:09:55.480 --> 0:09:57.600 its long term success. But down what is the risk 0:09:57.640 --> 0:10:00.520 to that part of the business from regulation rather than 0:10:00.559 --> 0:10:04.480 perhaps competition. Yeah, I'm really glad you asked that question. 0:10:04.559 --> 0:10:08.439 I think the regulators across the board continue to look 0:10:08.480 --> 0:10:12.240 at Google and of course the disproportionate amount of ads spending. 0:10:12.280 --> 0:10:15.079 I still don't think it's the biggest challenge that regulators 0:10:15.120 --> 0:10:18.320 actually have. I still find a lot of of what 0:10:18.360 --> 0:10:21.839 Apple does with its uh you know, it's captive app ecosystem, 0:10:22.040 --> 0:10:24.679 for instance, is a bigger issue. I mean, you see 0:10:24.720 --> 0:10:29.000 Amazon coming out with growth and its advertising business right now. 0:10:29.520 --> 0:10:32.199 Like I said, you see what chat GPT could potentially 0:10:32.280 --> 0:10:34.800 due to the everyday search that feeds so much of 0:10:34.800 --> 0:10:38.360 our ads that isn't really commerce demanded search, and you 0:10:38.400 --> 0:10:42.040 suddenly say, you know, does Google's long term um, you know, 0:10:42.240 --> 0:10:45.800 market strength? I don't dominance is the right word prevail 0:10:46.280 --> 0:10:48.760 with all this new AI and technology that's coming into 0:10:48.760 --> 0:10:51.720 the marketplace. Look, regulators are going to continue to regulate. 0:10:51.760 --> 0:10:54.800 Europe will always, for instance, continue to be very tough 0:10:54.840 --> 0:10:57.040 on big technology, and of course in the US we've 0:10:57.080 --> 0:11:00.360 got leadership in the FTC that's constantly looking to regulate. 0:11:00.520 --> 0:11:03.040 Having said that, I don't think Google is its biggest focus, 0:11:03.080 --> 0:11:05.959 nor should it be, and I don't think regulators will 0:11:05.960 --> 0:11:08.680 be doing any favors to the market by harming Google 0:11:08.800 --> 0:11:11.160 because I also think with all the Apple I D 0:11:11.320 --> 0:11:13.800 you know, the I D f A Apples and other 0:11:13.920 --> 0:11:17.200 scary you know, entrent to have a really dominant opportunity 0:11:17.280 --> 0:11:19.960 in advertising as it controls so much of the flow. 0:11:20.000 --> 0:11:22.280 Is what we saw with Meta. Well, many say Amazon 0:11:22.360 --> 0:11:26.599 is also competitive in advertising, and Amazon of course the 0:11:26.640 --> 0:11:30.439 juggnal when it comes to cloud services AWS, so some slowdown. 0:11:30.440 --> 0:11:32.560 We'll talk about that in a minute with our next guest, 0:11:32.600 --> 0:11:34.880 But talk to us about Alphabet and it's cloud offering. 0:11:34.920 --> 0:11:38.720 I mean, should it be committing this much, there's another loss. Yeah, 0:11:38.760 --> 0:11:41.360 well the losses are narrowed. And I do believe that 0:11:41.520 --> 0:11:44.559 Google has the opportunity with its customer base. It's uh, 0:11:44.600 --> 0:11:47.199 you know, it's BROADUS user base, and it's a lot 0:11:47.200 --> 0:11:51.040 of its technologies around data that it's become part of 0:11:51.080 --> 0:11:54.160 the enterprise's larger cloud ecosystem. So in what we talk 0:11:54.200 --> 0:11:58.480 called the multi cloud ecosystem. Google has been a consistent 0:11:58.640 --> 0:12:01.520 growth engine. You saw they grew up this quarter, which 0:12:02.000 --> 0:12:04.320 was right in part with with Azure and you know, 0:12:04.360 --> 0:12:06.400 faster than AWS. And I know you're gonna kick over 0:12:06.400 --> 0:12:08.280 to a w S, but you gotta look at a 0:12:08.440 --> 0:12:11.880 w S as an over eighty billion dollar business, and yes, 0:12:12.160 --> 0:12:16.280 slowing to is significant, but the business is so much 0:12:16.440 --> 0:12:19.680 larger than you know, some of the other cloud providers 0:12:19.720 --> 0:12:21.800 that I still think it WUS is in a really 0:12:21.800 --> 0:12:25.319 good position. Going back to Google, Google needs to continue 0:12:25.360 --> 0:12:27.840 to grow. It's going to have to hit an economy 0:12:27.840 --> 0:12:30.720 of scale right get profitable. I don't sense that making 0:12:30.760 --> 0:12:33.000 money is its biggest focus, but I think in this 0:12:33.040 --> 0:12:35.600 time of austerity, they're gonna have to get there quicker 0:12:35.640 --> 0:12:39.719 than they maybe wanted to. Future and research analyst d 0:12:39.720 --> 0:12:43.400 and human digesting breaking down a big nings report from 0:12:43.400 --> 0:12:45.040 out Bed, Thank you very much. Now coming out, we've 0:12:45.040 --> 0:12:46.600 got to state with earnings, and we're going to dive 0:12:46.840 --> 0:12:49.719 into Amazon's lackluster results. I just want to get a 0:12:49.800 --> 0:12:52.520 quick check on Qualcom ches and how they're looking in 0:12:52.600 --> 0:12:54.439 after hours training. We're actually down to and a half 0:12:54.520 --> 0:12:58.000 well four percent. Now that's Amazon, but I'm talking about 0:12:58.120 --> 0:13:01.240 Qualcolm the largest theory two and a half percent lower, 0:13:01.559 --> 0:13:04.240 a pretty weak forecast. At first, it was not that 0:13:04.360 --> 0:13:06.880 much of a decline because we saw this coming a 0:13:06.960 --> 0:13:10.400 slowdown in the smartphone market. But again the market listening 0:13:10.440 --> 0:13:12.320 to what executives are having to say on the call, 0:13:12.600 --> 0:13:16.479 and those losses accelerating in post market. This is Bloomberg. 0:13:25.679 --> 0:13:28.720 All the earnings come thick and fast on Thursday, and 0:13:28.760 --> 0:13:32.200 Amazon was among them of course as well. Earnings well 0:13:32.200 --> 0:13:35.920 showing some lack luster forecasts coming through. We're down three 0:13:35.600 --> 0:13:39.319 point immediately after hours, Slower cloud unit growth as well 0:13:39.360 --> 0:13:41.600 a w S, which is the profit center in many ways. 0:13:42.120 --> 0:13:44.640 Let's talk to Minissa Verdict, because she's not only co 0:13:44.679 --> 0:13:46.440 found in president of pack for You, which of course 0:13:46.480 --> 0:13:49.000 all about making the best of your e commerce provisions 0:13:49.000 --> 0:13:52.280 and marketing but also a tenure Amazon veteran. You know 0:13:52.400 --> 0:13:54.920 this business, particularly on the e commerce side. So let's 0:13:54.960 --> 0:13:58.280 start their overall, Melissa. When you're looking at what they're offering, 0:13:58.320 --> 0:14:02.360 the macroeconomic headwind all, they navigating it. All. They focusing 0:14:02.360 --> 0:14:05.160 and AFL and trimming costs, sudden growing growth and the 0:14:05.160 --> 0:14:08.800 way you'd like to see them. Uh, they're definitely focusing 0:14:08.800 --> 0:14:11.760 on that. I would say that they're focusing on profit 0:14:12.120 --> 0:14:15.520 at this point. Um. Amazon is famous for, you know, 0:14:15.720 --> 0:14:18.480 changing their knobs pretty quickly and they can go from 0:14:19.000 --> 0:14:22.920 driving brow to driving profit and that's what they're doing now. UM. 0:14:23.080 --> 0:14:26.360 Q four was a really interesting kind of quarter. There 0:14:26.480 --> 0:14:29.760 was definitely a slowdown in demand. UM consumers that were 0:14:29.760 --> 0:14:33.560 coming in, they're actually coming in to buy deals and discounts. Uh. 0:14:33.560 --> 0:14:36.200 And the good news is that Amazon is always known 0:14:36.240 --> 0:14:38.960 for having the greatest prices and so that that's something 0:14:39.000 --> 0:14:42.000 that was definitely going for them. But um, you know, 0:14:42.120 --> 0:14:45.280 unlike in years past, Amazon and Q four actually had 0:14:45.520 --> 0:14:49.640 more inventory. UM consumers wanted to buy on deals, so 0:14:49.680 --> 0:14:52.960 they came in, they bought during Black Friday's every Monday. UM. 0:14:53.000 --> 0:14:57.000 But you know, Amazon is really focused on cost cutting 0:14:57.040 --> 0:15:01.160 at this point, being efficient profit margin um in the 0:15:01.240 --> 0:15:04.760 face of having a lot of slower demand consumer demand. 0:15:06.200 --> 0:15:09.280 It's interesting on the cool Brander's abscie the CFOs talking 0:15:09.320 --> 0:15:13.080 about the layoffs and saying this round of layoffs is 0:15:13.200 --> 0:15:16.440 over and talking about the charges and impairments which they took. 0:15:16.800 --> 0:15:19.400 But Amazon is still kind of bloated. It seems still 0:15:19.440 --> 0:15:21.960 a big beast. Do you expect the company to be 0:15:22.000 --> 0:15:24.560 more nimble in terms of how it kind of adds 0:15:24.560 --> 0:15:29.280 and flows in hiring and reduction going forward. Absolutely, they 0:15:29.360 --> 0:15:33.200 hired half a million people and they have over one 0:15:33.480 --> 0:15:38.480 five million employees, so eighteen thou employees is not a 0:15:38.600 --> 0:15:41.840 huge amount. And in the face of slowing growths and 0:15:41.920 --> 0:15:45.200 slowing demand, you know, it's it's something to think about, 0:15:45.280 --> 0:15:47.840 which is they will have to look at their bottom line. 0:15:48.440 --> 0:15:50.800 Where do they lean into at the moment? When so, 0:15:50.960 --> 0:15:54.080 where are they able within the focus on profit to 0:15:54.160 --> 0:15:58.160 decide to allocate cash for growth? Well, the through the 0:15:58.280 --> 0:16:01.800 two businesses at Amazon that are very profitable are advertising 0:16:01.920 --> 0:16:06.040 and AWS. Uh So those are definitely areas that they 0:16:06.080 --> 0:16:09.040 plan on continue to invest in. The AWS is slowing 0:16:09.040 --> 0:16:12.600 what you worried by about. They're definitely both slowing um 0:16:12.600 --> 0:16:16.640 and absolutely. Uh. You know, AWS market share has dropped 0:16:16.680 --> 0:16:19.280 from forty three percent thirty four percent. They have a 0:16:19.320 --> 0:16:23.080 lot of competition with Microsoft and Google, and right now 0:16:23.400 --> 0:16:27.480 all companies unit hards are looking at cutting costs, and 0:16:27.640 --> 0:16:29.960 one of the first places you go to is AWS. 0:16:30.360 --> 0:16:31.960 So I think that is going to be a big 0:16:32.040 --> 0:16:35.320 challenge this year because companies are looking to cut be 0:16:35.440 --> 0:16:41.120 efficient themselves, and that will impact AWS. I guess my question, 0:16:41.200 --> 0:16:45.120 Melissa is how long does AWS be the sort of 0:16:45.240 --> 0:16:49.560 bankroller of the rest of the business, Because that's the 0:16:49.640 --> 0:16:53.320 situation right where Amazon has this sort of ginormous commerce business. 0:16:53.760 --> 0:16:57.840 There's the prime subscription element, the video and content element, 0:16:57.880 --> 0:16:59.920 but it's all kind of dependent on this cash cat. 0:17:00.000 --> 0:17:03.160 How you've been inside that that company, you know how 0:17:03.240 --> 0:17:05.960 it operates. Do you think they'll have a change, They'll 0:17:06.000 --> 0:17:10.399 have a snap snap free of that business model? Um, 0:17:10.560 --> 0:17:12.840 I mean serve the services business. Amazon has become a 0:17:12.880 --> 0:17:18.560 services business. It's over of their revenue across AWS, advertising 0:17:18.640 --> 0:17:22.280 and subscriptions, and so that will continue. And I think 0:17:22.359 --> 0:17:24.560 that you know, one thing that Amazon is well known 0:17:24.640 --> 0:17:27.600 for is innovation. The thing that can't control is the 0:17:27.720 --> 0:17:30.080 demand and the cost cutting part that other people are 0:17:30.119 --> 0:17:34.440 doing and that impacts AWS. UM, I think advertising is 0:17:34.440 --> 0:17:37.400 a bright star. They're doing so many things there. Crime 0:17:37.560 --> 0:17:40.600 video for the first time surpassed as Netflix is the 0:17:40.680 --> 0:17:44.280 top streaming service. Amazon talked about a hundred million viewers 0:17:44.520 --> 0:17:47.639 watching a Lord of the Rings. Um, more people watching 0:17:47.720 --> 0:17:51.720 streaming means more advertising revenue to Amazon, and so that 0:17:52.000 --> 0:17:55.080 is a big star for them. Very briefly. We've touched 0:17:55.119 --> 0:17:58.000 on it with Alphabet, but the regular story overhang anything 0:17:58.080 --> 0:18:02.919 that worries you with Amazon. Uh, the DJ definitely has 0:18:03.000 --> 0:18:06.160 Amazon as a target. It's really hard to call them 0:18:06.200 --> 0:18:09.479 and monopoly with so much competition. They actually have slipping 0:18:09.560 --> 0:18:12.760 market share in AWS. But that's not to say that 0:18:12.840 --> 0:18:14.800 it's not going to be a distraction and something that 0:18:14.880 --> 0:18:16.960 they're going to have to answer. So you know, this 0:18:17.080 --> 0:18:19.879 happened before with private label UM and they had to 0:18:20.119 --> 0:18:23.119 answer to that. So it'll continue to be something that 0:18:23.680 --> 0:18:27.200 all these tech companies are dealing with. But I see 0:18:27.280 --> 0:18:30.840 less of kind of a like to stand on pact 0:18:30.880 --> 0:18:33.280 for your co founder and president, Melissa birt It, thank 0:18:33.320 --> 0:18:36.360 you so much for breaking down again and now they're challenging. 0:18:36.400 --> 0:18:47.760 Earnings report from Amazon now is one of the most 0:18:47.840 --> 0:18:50.560 read stories on the terminal amongst our clients, at least today, 0:18:50.800 --> 0:18:53.520 because some major hedge funds they've been asked by US 0:18:53.560 --> 0:18:57.600 regulators to review certain employees personal mobile phones. Why because 0:18:57.600 --> 0:18:59.920 it's all part of this big probe that continues to 0:19:00.080 --> 0:19:03.959 mushroom of Wall Street's use of unofficial messasaging platforms, basically 0:19:04.280 --> 0:19:06.760 the use of WhatsApp to be able to do deals, 0:19:06.880 --> 0:19:09.439 broker potentially M and A and that sort of thing. 0:19:09.520 --> 0:19:12.520 And ultimately we're hearing that the SEC has our Steve 0:19:12.640 --> 0:19:16.919 Cohen's points on only two Ken Griffin's Citadel other firms 0:19:17.000 --> 0:19:19.960 as well. But what about the liability here? What about 0:19:20.040 --> 0:19:22.399 people's phones? What sort of data might we end up 0:19:22.560 --> 0:19:25.000 sort of unfolding here in terms of health, in terms 0:19:25.040 --> 0:19:27.560 of finance, Well, we should say those hedge funds you name, 0:19:27.680 --> 0:19:30.040 no one's been accused of any wrongdoing, but they are 0:19:30.160 --> 0:19:35.879 literally asking them to review the devices for any transactional stuff, 0:19:35.920 --> 0:19:38.960 that business stuff that's being done on them inappropriately. That's 0:19:39.000 --> 0:19:41.000 the reality of what's playing out on Wall Street. We've 0:19:41.000 --> 0:19:44.720 already seen the fines being exerted upon the brokerages and 0:19:44.840 --> 0:19:48.080 the actual banks. We see asset managers kind of pushed 0:19:48.119 --> 0:19:57.720 back at the moment, I'll come back to Bluemo technology. 0:19:57.720 --> 0:19:59.159 I'm Caroline had in New York, and let's get you 0:19:59.240 --> 0:20:00.760 up to speed with some of cost cuts, some of 0:20:00.800 --> 0:20:03.439 the layoffs, whether they're done or not. Lumbag intelligence put 0:20:03.480 --> 0:20:05.960 on oil and pieces says with us Rumas Tech Executive 0:20:06.080 --> 0:20:08.639 editor Tom Jailes as well, start with you and on 0:20:08.800 --> 0:20:12.119 Amazon because ed talking about this reset and alphabet, this 0:20:12.240 --> 0:20:14.680 focus on being more disciplined and on cost cuts, the 0:20:14.720 --> 0:20:17.480 layoffs Amazon's used to be saying, look the cost cuts, Well, 0:20:17.640 --> 0:20:20.800 certainly the layoffs are done. Are they right sizing in 0:20:20.840 --> 0:20:23.280 the way that the market wants to see? Well, they're 0:20:23.400 --> 0:20:25.320 there are laborers down for a percent and a year 0:20:25.400 --> 0:20:28.280 or a year basis, So they did right size a little. 0:20:28.400 --> 0:20:31.640 Now you can argue that could they do more? Sure, 0:20:31.840 --> 0:20:34.880 but maybe they're just waiting to see how things unfold. 0:20:35.080 --> 0:20:38.800 And remember Amazon's a business where many parts of it 0:20:38.880 --> 0:20:42.399 are still in rapid growth mode, whether that's advertising a 0:20:42.720 --> 0:20:46.280 WS or um even on the three P side where 0:20:46.400 --> 0:20:49.440 they really are growing much faster than expected, or the 0:20:49.560 --> 0:20:53.879 overall retail business despite resolve all down. Sorry it interrupts 0:20:53.880 --> 0:20:55.520 you out, Tom, I actually want to pivot to Apple 0:20:55.640 --> 0:20:58.119 because we kind of saw this coming, you know, we 0:20:58.200 --> 0:21:01.320 knew that December would be really tasked. They missed estimates 0:21:01.359 --> 0:21:04.560 basically across all the products, and the markets reacting as 0:21:04.600 --> 0:21:07.800 you'd expect, pretty negatively. But is that a surprise. I mean, 0:21:07.880 --> 0:21:10.600 we thought they'd be weak. We saw the headlines out 0:21:10.640 --> 0:21:12.560 of China. We knew that there were going to be 0:21:12.680 --> 0:21:16.080 supply chain constraints, We saw the lockdowns, and we saw 0:21:16.160 --> 0:21:20.080 the impact, and and Apple is absolutely feeling it. In 0:21:20.160 --> 0:21:23.719