What Display Daily thinks:The second quarter has been a breath of fresh air for many companies after a few quarters of the blahs, but let’s not get too excited here.
Meta and Google have been increasing ad prices to make up for any shortfalls in demand or stagnation in growth. Whether advertisers can bear that burden long-term is up for debate. Results and engagement from ads haven’t made that commensurate leap. It may not be a direct impact on display sales, but I think it means you have to be cautious when you think about consumer sentiment.
Apple has dropped by anywhere between 8% and 19% in China, Hong Kong, Taiwan, and Singapore. We’ll probably never know the extent of Apple woes in any market, but local competition is not going to go away and it is hard to see how Apple can fight back without being more aggressive on pricing. Additionally, wearables are taking a hit, too. Apple’s key display suppliers are locked in but is there a point when Apple starts to think about competitive pricing and lower cost models? I mean, in real terms, in terms that make Apple competitive against Oppo or Xiaomi. That would certainly change the display business, but it is more likely that Apple will continue to squeeze its existing suppliers.
The news cycle for second quarter results is driven by the demands of investor looking for dividends and share price upticks. The big news is that there was a lot of positive news this last quarter after many quarters of less than exuberant news. However, all the outlook projections point to an uncertain third quarter if you don’t have the benefit of being able to invest a small nation’s GDP in AI data centers.
AI and AI hype is going to drive the market for tech for at least the next twelve months. What does that mean for the display industry? More OLED laptop screens? More monitor sales?
Maybe it is just better to surf the wave and not worry about how long the ride lasts.
Second Quarter Results for Meta, Apple, and Microsoft
Meta
- Revenue was $39.07 billion, up 22% year-over-year (YoY), surpassing analysts’ estimates of $38.31 billion.
- $13.5 billion in profits for the quarter.
- The outlook has significant emphasis on AI, with projected capital expenditures rising for 2025.
Microsoft
- Revenues hold steady at $64.7 billion, slightly above Wall Street’s estimate of $64.5 billion, representing a 9% YoY increase.
- As you would expect, Cloud and AI play a big role in the company’s pitch. However, while the Azure cloud computing unit grew by 29%, it missed the expected 31% growth rate. Intelligent Cloud division revenue was $28.52 billion, below the $28.68 billion estimate.
- CEO Satya Nadella, like his peers, expressed optimism about future AI prospects and the company is going to keep investing because everyone is doing it and you can’t get left behind.
Apple
- Revenues were $85.78 billion, surpassing Wall Street estimates of $84.53 billion, with a 5% YoY increase.
- The performance of products was a mixed bag of news:
- iPhone revenue were $39.30 billion, which was a 1% YoY decline but still above projections.
- iPad sales increased nearly 24% to $7.16 billion.
- Mac sales grew by 2% to $7 billion.
- Wearables, home, and accessories dropped 2% to $8.10 billion.
- The services segment grew 14% to $24.21 billion, hitting an all-time high.
