A sign advertises the iPhone 16e inside an Apple store in San Francisco.
Photographer: David Paul Morris/BloombergWelcome to Tech In Depth, our daily newsletter with reporting and analysis about the business of tech from Bloomberg’s journalists around the world. Today, Brody Ford writes that Apple and Amazon’s quarterly results show that Big Tech can’t avoid the pain of US tariffs.
Senior riders: Uber debuted a new streamlined ridesharing app aimed at older adults, hoping to get a greater portion of a large market. Rival Lyft quickly followed, saying its simplified app for seniors will be available beginning in a few days.
Spy recruitment: The US Central Intelligence Agency is using videos on social media networks like Elon Musk’s X to try to recruit Chinese officials to provide information about the government.
Harrods hack: The London luxury department store reported an attempted cyberattack, just days after two other UK retailers said they were hacked. Harrods said it rebuffed the attack.
Dream Games, the maker of the Royal Match smartphone game, has raised about $2.5 billion in debt and equity. The deal, which will make private equity firm CVC Capital Partners its sole equity investor, values the Turkish company at $5 billion — almost double the $2.75 billion valuation in 2022.
Recessionary fears, changes in global economic conditions, tariffs. These were some of the factors Amazon.com Inc. cited when giving a profit forecast billions below what Wall Street expected.
“None of us knows exactly where tariffs will settle or when,” Chief Executive Officer Andy Jassy said on an earnings call Thursday. For now, Amazon said its future results are “inherently unpredictable.”
Quarterly results Thursday from Amazon and Apple Inc., two of the world’s most valuable companies, showed that economic disruption from President Donald Trump’s tariffs have reached the tech industry. At least, the part of the tech industry that sells physical things.
The iPhone maker said that tariffs would increase its costs $900 million in the current quarter. Apple’s sales in China — where Trump has focused much of his trade war — missed investor expectations.
It was a much different message than those earlier from other Big Tech companies — Microsoft Corp., Meta Platforms Inc. and Alphabet Inc. Their results showed that, for now, it’s business as usual when selling digital goods like software advertisements and cloud computing services.
The big difference? Import taxes don’t apply to installations of Microsoft Word or YouTube ads the same way they do to a new coffee maker bought on Amazon. Plus, the primary customers of software and cloud computing are businesses, which don’t get spooked as quickly as consumers.
You or I may hold off on a big purchase after hearing the concerning economic news. But corporations make buying decisions further in the future, and are less subject to vibe shifts. Budgets today were probably allocated six months ago.
Of course, the insulation for companies like Google could be short-lived. Even firms selling digital goods are subject to tariffs in the form of the goods they buy — and deteriorating economic conditions will affect their customers as well.
Meta said that it would spend billions more on data center infrastructure this year than previously expected, in part due to an increase in costs for the hardware to run those centers. Microsoft raised prices on its Xbox gaming consoles Thursday, citing higher development costs.
And it may just take longer for economic disruptions to reach business-oriented vendors. If costs go up for companies across America, they’ll have less cash left over to buy ads on Facebook. International Business Machines Corp. cautioned investors last month that economic uncertainty may cause its clients to pause buying.
Meta and Microsoft have each added warnings to their financial reports this year about the potential impact of trade policy changes.
“Changes in global trade policies such as restrictions on international trade, including tariffs and other controls on imports or exports, could result in increased supply chain challenges, cost volatility, and consumer and economic uncertainty,” Microsoft wrote in a regulatory filing Wednesday. These “may adversely affect our results of operations.”
The US is weighing whether to ease restrictions on the sale of Nvidia Corp.’s high-powered artificial intelligence chips to the United Arab Emirates. The debate within the US administration over semiconductor trade rules for the UAE and other countries remains ongoing, but President Donald Trump could announce the start of work on a bilateral chip deal during his upcoming trip to the Gulf.
Mark Mahaney, senior managing director at Evercore ISI, joins Bloomberg Technology to discuss why Meta’s quarterly results suggest the company is benefiting from its massive investment in artificial intelligence.
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