Apple and Amazon sales up despite rising prices

Overall, sales of Apple products and services rose 2% year-on-year between April and June to $83bn. Sales of iPhones continued to power the company’s gains, as supply constraints held back sales of other products.

Its services business, which includes Apple Pay and its streaming music and television services, also grew 12%.

Meanwhile, Amazon said its revenues were up 7% to $121.2bn, despite its e-commerce business being hit in recent months. Online sales shrank 4%, the second quarter in a row of decline.

But the company continues to be shielded by the strength of its clouding computing division, AWS, which saw sales soar by 33%.

In spring Amazon spooked investors, as its online sales softened and it warned it had spent too heavily to hire and add warehouses in a bet that pandemic-era shopping patterns would continue.

But it provided a more optimistic outlook this time.

“Despite continued inflationary pressures in fuel, energy, and transportation costs, we’re making progress on the more controllable costs we referenced last quarter, particularly improving the productivity of our fulfilment network,” said chief executive Andy Jassy.

Amazon said its e-commerce sales were poised to look especially weak because Prime Day, when discounts typically drive a surge of buying, was moved from June to July.

“Big tech’s been a mixed bag this earnings season, but Amazon proved that the strong can survive even the toughest environments,” said Laura Hoy, equity analyst from Hargreaves Lansdown.

Apple and Amazon are too big not to be affected by signs of slowdown in the global economy, said Scott Kessler, global sector lead at Third Bridge.

But their size gives them somewhat unique power to navigate those challenges, particularly when it comes to negotiating prices.

“Apple’s done an excellent job of managing those costs – it doesn’t hurt that they’re typically one of the biggest purchasers,” he said.

However, Christie Pitts, a general partner at tech fund Backstage Capital, told the BBC that Amazon saw some pressure on its results, in part due to the impact of inflation, “as consumers have less discretionary money to spend on impulsive purchases”.