How tech giants took advantage of the pandemic
While travel restrictions, social distancing and imposed lockdowns put many companies and startups out of business, they served to increase our dependence on technology. From online meetings and classes to entertainment, the pandemic turned tech giants like Facebook, Apple, Google, Microsoft and Amazon into indispensable parts of the new normal.
In a dramatic reversal of fortune for the big tech companies, Amazon and Facebook capitalised on being seen as essential for people in lockdown, while Google and Apple built tools that enabled state health departments to provide critical public services like contact tracing for Covid-19 infections. Be it through shifting focuses, introducing new products or refining recruitment strategies, here's how the five big tech companies took advantage of the pandemic.
Amazon
According to Forbes, Amazon's revenues were expected to grow by 27% to US$488 billion by 2021. True to those predictions, consumers being trapped indoors only spelt opportunities for the e-commerce giant. Besides seeing a staggering rise in Amazon deliveries, the tech giant also profited from the increased viewership on its streaming platform throughout the pandemic.
While services like Amazon's were naturally expected to thrive with travel restrictions and lockdowns, another example of company success in the pandemic comes from Zoom. From rising through the share market ranks to becoming a verb in our day-to-day lives, video chatting services by Zoom also played a part behind Amazon's flourishment. With a chunk of Zoom hosted by Amazon's cloud services division AWS, the tech giant only stood to gain from Zoom's success.
Alphabet, Google's parent company, has proven more than resilient during the pandemic, reaching a market value close to US$2 trillion.
Raking in most of its earnings from Google's advertising and YouTube, sales and profits for Alphabet reached record highs throughout the pandemic. Following the closure of most nurseries, schools and educational institutions, Google's services like Google Classroom and YouTube Kids saw an unprecedented rise in users.
Besides more revenue from paid advertisements targeting home-bound shoppers, Google Workspace services like Meet, Docs, Sheets and more became indispensable parts of working from home. Paired with their innovation in terms of contact tracing technology, Google Pixel phones and more, the pandemic presented many wins for the tech giant.
Apple
Besides having deeper pockets than most companies heading into the pandemic, Apple continued to thrive with sales of Macs, iPads and iPhones. While the shift to remote work and school only drove up demands for new Apple devices, digital subscriptions for Apple TV and iTunes also helped the big tech company flourish this year.
Reporting a revenue of US$365.8 billion in 2021, Apple also witnessed a boost in their sales with the release of the low-cost iPhone SE which put the company in a better position, despite the financial pitfalls of the Covid-19 crisis.
From connectivity to entertainment and news, throughout the pandemic, Facebook has kept us tethered to friends, family, workgroups and more. Reaching 2.89 billion users across Facebook, Instagram and Whatsapp, the tech giant also saw considerable profits from its targeted online advertising as well as moderate non-advertising revenue from sales of the Oculus Quest VR headset.
Another key aspect of Facebook's rise in the pandemic came from an auction-like system to increase advertisement charges alongside increased demand, with their average price per ad growing by 47% in the second quarter of 2021.
Microsoft
Even in the pandemic, Microsoft remained one of the most valuable companies in the world, worth nearly US$1.3 trillion.
The tech giants' deep pockets enabled them to withstand the financial downfalls of the pandemic, while also allowing the company to benefit from increased demand for Microsoft hardware, software and cloud systems for remote and hybrid work. Besides, the tech giant also benefited from the uptick in the gaming and entertainment industry with its Xbox series X consoles and game streaming services.
While each of the big tech companies followed their own unique strategies to take advantage of the pandemic, all of them shared some common perks, namely- deeper pockets, better recruitment capacity and swiftly adapting to the new normal. Where traditional companies declared bankruptcy and laid-off workers in hordes, companies like Amazon lead hiring sprees for nearly 175,000 new warehouse jobs.
Therefore, while the economic contraction killed off more and more businesses, more spaces were opened up for the big tech companies to occupy, with the largest firms being some of the only companies in the position to do any hiring in the pandemic. Snapping up the best talent, taking over competitors and positioning their own services as essential parts of life in the pandemic were the factors that not only kept big tech companies afloat but helped them thrive overall.