By Associated Press | Updated: 29 July 2022
Amazon on Thursday reported its second-consecutive quarterly loss but its revenue topped Wall Street expectations, sending its stock sharply higher.
The Seattle-based e-commerce giant also said it is making progress in controlling some of the excess costs from its massive expansion during the COVID-19 pandemic.
Amazon lost $2.03 billion (roughly Rs. 16,000 crore) or 20 cents per share, in the three-month period ended June 30, driven by a $3.9 billion (Roughly Rs. 30,700 crore) write-down of the value of its stock investment in electric vehicle start-up Rivian Automotive.
That compared to a profit of $7.78 billion (roughly Rs. 61,800 crore) a year ago. It posted a loss of $3.84 billion (roughly Rs. 30,500 crore) in this year’s first quarter, its first quarterly loss since 2015, which was also marked by a large Rivian write-down. Analysts had been expecting a 12-cent profit in the latest quarter, according to FactSet.
But Wall Street was cheered by Amazon’s $121.2 billion (roughly Rs. 96,00,000 crore) in revenue, topping expectations of $119 billion (roughly Rs. 94,50,000 crore). The results came as the company attempts to navigate shifting consumer demand and higher costs, while curtailing the glut of warehouses it acquired during the COVID-19 pandemic.
Shares in Amazon rose almost 14 percent in after-hours trading.
CEO Andy Jassy said in a statement that Amazon is seeing its revenue accelerate as it invests in its Prime membership and offers more benefits to members, such as its recent deal to give free access to meal delivery service Grubhub for a year.
Subscription services have grown 10 percent compared to the prior year. Some analysts estimate the company generated roughly $4.6 billion (roughly Rs. 36,500 crore) in revenue during its Prime Day shopping event, which it held during the second quarter last year but moved to the third in 2022. Amazon noted sales have also been dampened by foreign exchange rate fluctuations.
“Against this context, Amazon’s performance is reasonable enough — but it is still a very long way from the stellar numbers Amazon usually produces,” said Neil Saunders, managing director of GlobalData. Jassy noted the company continues to feel inflationary pressure from higher energy and transportation costs, but it’s been making progress controlling expenses related to its fulfillment network.
Between 2019 and 2021, Amazon nearly doubled the number of warehouses and data centers it leased and owned to keep up with rising consumer demand. But as consumers shifted their habits, Amazon found itself with too many workers and too much space, which added billions in extra costs. The company has been subleasing some of its warehouses, ending some of its leases and deferring construction on others to deal with the problem.
Amazon’s Chief Financial Officer Brian Olsavsky said during a media call Thursday the company is slowing down its expansion plans for this year and the next to better align with customer demand. He said the company is also planning to shift capital investments towards its cloud-computing unit AWS.
Amazon’s retail operations both internationally and in North America reported operating losses, showing the company is suffering the same fate as Walmart and Target, Saunders said. Costs are outpacing sales and growth, though Amazon can dip into other profit pools — like AWS — to protect its overall performance, he said.
AWS, which is facing increasing competition from Microsoft Azure, earned $19.74 billion (roughly Rs. 1,55,000 crore) in revenue, a 33 percent jump from last year. While Amazon’s advertising unit, another burgeoning moneymaker, pulled in $8.76 billion (roughly Rs.69,000 crore), an 18 percent increase from last year.
On the labor side, Amazon has been able to reduced its headcount through attrition and staffing levels were more in-line with demand, Olsavsky said. The company had 1.52 million employees by the end of June, down 6.1 percent from the first quarter. The performance of the broader economy is expected to shape its hiring plans moving forward.
“I don’t think you’ll see us hiring at the same pace we did over the last year, or in last few years,” Olsavsky said, adding the company will continue to hire targeted positions for profitable units, like its advertising business and AWS.
Despite Wall Street’s celebration, the e-commerce and tech giant’s revenue growth still landed at a relatively sluggish 7 percent, about the same as the first quarter of this year and its slowest in about two decades. It comes as the pandemic-induced consumer reliance on online shopping dies down and Americans are shifting their spending habits away from things like home improvements towards traveling and eating out.
Consumers and businesses are also feeling the weight of surging inflation, which is at its highest in 40 years. Faced with rising costs of food and gas, Americans have dialed back purchases on discretionary items, forcing Walmart, Target and other retailers with extra inventory to offer more discounts on items like electronics. Though Olsavsky said inflation hasn’t cooled down demand.
“We saw demand increase during the quarter and had a very strong June,” he said.
Olsavsky also noted third-party sellers represented 57 percent of total units sold on Amazon during the quarter, the highest in the company’s history.
Amazon is expecting to post between $125 billion (roughly Rs. 99,00,000 crore) and $130 billion (roughly Rs. 10,32,000 crore) in revenue for the third quarter, a growth of 13 percent to 17 percent compared to the same period a year ago. Analysts are expecting $126.49 billion (roughly Rs. 10,00,000 crore), according to FactSet.
Google Says Decade-Old Demand for Shared Network Costs by EU Telecom Operators is Bad for Consumers
By Reuters | Updated: 26 September 2022
Alphabet unit Google on Monday rebuffed a push by European telecoms operators to get Big Tech to help fund network costs, saying it was a 10-year-old idea that was bad for consumers and that the company was already investing millions in Internet infrastructure.
The comments by Matt Brittin, president of EMEA business & operations at Google, come as the European Commission said it would seek feedback from the telecoms and tech industries on the issue in the coming months before making any legislative proposal.
Deutsche Telekom, Orange, Telefonica and other big operators have long complained about tech rivals freeriding on their networks, saying that they use a huge part of internet traffic and should contribute financially.
The idea, floated more than 10 years ago, could disrupt Europe’s net neutrality or open internet access, Brittin said.
“Introducing a ‘sender pays’ principle is not a new idea, and would upend many of the principles of the open Internet,” he said according to the text of a speech to be delivered at a conference organised by telecoms lobbying group ETNO.
“These arguments are similar to those we heard 10 or more years ago and we have not seen new data that changes the situation.”
It “could have a negative impact on consumers, especially at a time of price increases,” Brittin said, citing a report by pan-European consumer group BEUC outlining such concerns.
He said Google, owner of YouTube, has done its part to make it more efficient for telecoms providers by carrying traffic 99 percent of the way and investing millions of euros to do so.
“In 2021, we invested over 23 billion euros in capital expenditure – much of which is infrastructure,” Brittin said.
These include six large data centres in Europe, 20 subsea cables globally, with five in Europe, and caches to store digital content within local networks in 20 locations in Europe.
© Thomson Reuters 2022
Elon Musk Deploys Starlink Service in Iran Amid Country-Wide Internet Restrictions
By ANI | Updated: 24 September 2022
Tesla CEO Elon Musk has deployed his satellite-based Starlink service in Iran amid widespread protests in the country following which authorities had restricted internet access.
This Iranian government had cut off internet access for many of its citizens on Wednesday amid widespread protests over the death of a 22-year-old woman, Mahsa Amini, in police custody, according to reports.
On Friday, SpaceX founder Elon Musk had indicated that he will make Starlink available in Iran.
US State Secretary Antony Blinken earlier announced on Twitter about advancing internet freedom and the free flow of information for the Iranian people by issuing a General License to provide them greater access to digital communications to counter, what he claimed, was the Iranian government’s censorship.
We took action today to advance Internet freedom and the free flow of information for the Iranian people, issuing a General License to provide them greater access to digital communications to counter the Iranian government’s censorship.— Secretary Antony Blinken (@SecBlinken) September 23, 2022
Replying to Blinken’s tweet, Musk wrote, “Activating Starlink.”
Activating Starlink …— Elon Musk (@elonmusk) September 23, 2022
Protestors have been demanding basic rights of freedom and holding demonstrations against the mandatory dress codes including the compulsory wearing of the Hijab.
The protests in Iran erupted last weekend after Mahsa Amini died following her detainment by Iran’s morality police. She died a few days after falling into a coma while being detained on an accusation of violating a law related to hijabs.
It is worth noting that earlier this week, lawmakers from New York and New Jersey had urged the US Treasury Department to grant approval if SpaceX sought licensing permission to make internet service available in Iran.
Lawmakers, led by Claudia Tenney of New York and Tom Malinowski of New Jersey, reportedly made the appeal to the Treasury Department, Fox News had reported. The letter came after Musk tweeted Monday that SpaceX would seek exemptions from sanctions on the country.
SpaceX has deployed Starlink in emergency situations in past, such as in Ukraine after Russia invaded and in the South Pacific islands of Tonga after a volcanic eruption.
Meesho Records Nearly 87.6 Lakh Orders on Day 1 of 5-Day Festive Sale
By Press Trust of India | Updated: 24 September 2022
Softbank-backed e-commerce firm Meesho on Saturday said it registered around 80 percent jump in the business with close to 87.6 lakh orders on Friday, the first day of its five-day festive season sale.
Tier 2, 3 and 4 cities accounted for around 85 percent of orders on day one, the company said in a statement.
“Meesho clocked a record around 87.6 lakh orders on the first day of its flagship festive sale event — the Meesho Mega Blockbuster Sale. This is the highest number of orders recorded by the company in a single day – up about 80 per cent from day one of previous year’s sale,” the statement said.
The company said that it has received orders from deep corners of the country such as Jamnagar, Alappuzha, Chhindwara, Davengere, Hassan, Gopalganj, Guwahati, Siwan, Thanjavur and Ambikapur.
“With a wide assortment of around 6.5 crore active product listings at lowest prices, the sale exemplifies Meesho’s mission towards democratising e-commerce for everyone,” it said.
Fashion, beauty & personal care, home & kitchen, and electronic accessories were the top-selling categories on day one, while consumers bought everything from sarees to analogue watches, jewellery sets, mobile cases and covers, Bluetooth headphones, choppers and peelers in record volumes to fulfil their festive shopping aspirations, the company said.
“With around 85 per cent of orders and approximately 75 percent of sellers coming from Tier 2 and beyond cities, we are humbled to have created a far-reaching impact in the deepest corners of the country.
“We will continue to fuel the discoverability of hyperlocal businesses and products, empower MSMEs and further boost accessibility and affordability for our heterogeneous base of consumers,” Meesho CXO for Business Utkrishta Kumar said.
Qualcomm Automotive Future Business Increases to $30 Billion With Snapdragon Digital Chassis Product: Details
By Reuters | Updated: 23 September 2022
US chip designer Qualcomm Inc on Thursday said its automotive business “pipeline” increased to $30 billion (roughly Rs. 2,42,770 crore), up more than $10 billion (roughly Rs. 81,000 crore) since its third quarter results were announced in late July.
The jump in future business was thanks to its Snapdragon Digital Chassis product used by car makers and their suppliers, Qualcomm said at its Automotive Investor Day. The Snapdragon Digital Chassis can provide assisted and autonomous driving technology, as well as in-car infotainment and cloud connectivity.
With electric vehicles and increasing autonomous features in cars, the number of chips used by automakers is surging and the automotive market has been a key growth area for chipmakers.
“When you think about a per car basis, a lower tier car, we have an opportunity of approximately $200 stretching all the way to $3,000 (roughly Rs. 2.4 lakh) at the high tier,” said Akash Palkhiwala, Qualcomm’s CFO.
“Going forward the mix will continue to shift towards the high end so the opportunity will keep expanding.”
Qualcomm said the automotive market size it is targeting could grow to as large as $100 billion (roughly Rs. 8,09,500 crore) by 2030.
In fiscal year 2022, it estimates its automotive business revenue will be about $1.3 billion (roughly Rs. 10,520 crore), from $975 million (roughly Rs. 7,900 crore) the previous year. By fiscal year 2026, it estimates that to rise to over $4 billion (roughly Rs. 32,400 crore) and in fiscal year 2031 to over $9 billion (roughly Rs. 72,850 crore).
Qualcomm also announced an expanded partnership with Mercedes Benz Group AG which will be using the Snapdragon Cockpit for its in-car infotainment system from 2023.
Qualcomm also has many automotive customers in China. Asked about the impact of broader US export regulations, CEO Cristiano Amon said “strong win-win partnerships between the US enterprises and the China enterprises will always be a force of stability”.
“But we’ll see what the future holds,” he added.
Earlier this week, chipmaker Nvidia unveiled a new automotive central computer called DRIVE Thor to provide autonomous and assisted driving as well as in-car digital entertainment and services.
© Thomson Reuters 2022
Jeff Bezos, Andy Jassy Ordered by US FTC to Testify in Amazon Prime Investigation
By Associated Press | Updated: 23 September 2022
Federal regulators are ordering Amazon founder Jeff Bezos and CEO Andy Jassy to testify in the government’s investigation of Amazon Prime, rejecting the company’s complaint that the executives are being unfairly harassed in the probe of the popular streaming and shopping service.
The Federal Trade Commission issued an order late Wednesday denying Amazon’s request to cancel civil subpoenas sent in June to Bezos, the Seattle-based company’s former CEO, and Jassy. The order also sets a deadline of Jan. 20 for the completion of all testimony by Bezos, Jassy and 15 other senior executives, who also were subpoenaed.
Jassy took over the helm of the online retail and tech giant from Bezos, one of the world’s richest individuals, in July 2021. Bezos became executive chairman.
Amazon hasn’t made the case that the subpoenas “present undue burdens in terms of scope or timing,” FTC Commissioner Christine Wilson said in the order on behalf of the agency. However, the FTC did agreed to modify some provisions of the subpoenas that it acknowledged appeared too broad.
The FTC has been investigating since March 2021 the sign-up and cancellation practices of Amazon Prime, which has an estimated 200 million members around the globe.
The company said it was disappointed but not surprised that the FTC mostly ruled in favor of its own position, but it was pleased that the agency “walked backed its broadest requests” in the subpoenas.
“Amazon has cooperated with the FTC throughout the investigation and already produced tens of thousands of pages of documents,” the company said in a statement. “We are committed to engaging constructively with FTC staff, but we remain concerned that the latest requests are overly broad and needlessly burdensome, and we will explore all our options.”
In a petition to the FTC filed last month, the company objected to the subpoenas to Bezos and Jassy, saying the agency “has identified no legitimate reason for needing their testimony when it can obtain the same information, and more, from other witnesses and documents.” Amazon said the FTC was hounding Bezos, Jassy and the other executives, calling the information demanded in the subpoenas “overly broad and burdensome.”
The investigation has widened to include at least four other Amazon-owned subscription programs: Audible, Amazon Music, Kindle Unlimited, and Subscribe & Save, as well as an unidentified third-party program not offered by Amazon. The regulators have asked the company to identify the number of consumers who were enrolled in the programs without giving their consent, among other customer information.
With an estimated 150 million US subscribers, Amazon Prime is a key source of revenue, as well as a wealth of customer data, for the company, which runs an e-commerce empire and ventures in cloud computing, personal “smart” tech and beyond. Amazon Prime costs $139 a year. The service added a coveted feature this year by obtaining exclusive video rights to the NFL’s “Thursday Night Football.”
Last year, Amazon asked unsuccessfully that FTC Chair Lina Khan step aside from separate antitrust investigations into its business, contending that her public criticism of the company’s market power before she joined the government makes it impossible for her to be impartial. Khan was a fierce critic of tech giants Facebook (now Meta), Google and Apple, as well as Amazon. She arrived on the antitrust scene in 2017, writing an influential study titled “Amazon’s Antitrust Paradox” when she was a Yale law student.
UPI Daily Transactions Expected to Cross 1 Billion-Mark in Next 5 Years: Nirmala Sitharaman
By ANI | Updated: 20 September 2022
Union Finance Minister Nirmala Sitharaman on Tuesday said the Unified Payments Interface-based transaction is expected to reach one billion per day in the next five years.
Addressing an event organised by the industry body FICCI, Sitharaman said that the data released by NPCI shows that UPI reported 6.28 billion transactions worth Rs. 10.62 trillion (nearly Rs. 11,00,000 crore) in July 2022.
“Substantial growth is being seen in transactions on a monthly basis. UPI aims to process one billion transactions a day in the next five years,” she said.
The Finance Minister also said that technology adoption in India is very high not only in major cities but also in tier-2 and 3 cities and rural areas. “Digital adoption by Indian citizen is amazing,” she added.
Addressing the session ‘Future of Financing’ at FICCI LEADS 2022, Sitharaman said that the future of finance is going to be Volatile, Uncertain, Complex and Ambiguous (VUCA) and “there is a sense of urgency with which we need to plan.”
She also stated that the role of artificial intelligence is going to be critical in fintech sector. “I see a big role for AI in fintech sector in detection of fraud, crime and accessing the risks. We will have to ensure personal data security, national and cyber security in our planning,” she added.
The Finance Minister stated that India is working on a system where only a single KYC is needed which can be used across different spheres.
Sitharaman further stated that the future of finance will be driven more and more through banking and related services and account aggregators will play a crucial role in it. “Account aggregator system has been adopted by 21 banks including public sector banks,” she added.
The union minister emphasised that the link between start-ups, fintech and private equity is visible. There are 6,636 start-ups and 21 unicorns in fintech sector and private equity have helped them to become start-up. “Private equity is pushing them quickly in the path of progress,” she said.
“We need to make sure that climate risks are not going to hit us because we are talking about a future that is digital,” she added.
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