Apple competitor Alphabet earnings up on Google, YouTube & hardware, supplier Intel sees profits dip
Apple rival Alphabet saw its revenues grow dramatically in the December quarter, while Intel — a key Apple supplier — saw mixed results, in spite of delivering more parts in the form of wireless chips for the iPhone 7.
Alphabet revenues grew 22 percent year-over-year to $26.02 billion, driven primarily by Google searches and YouTube, the company said on Thursday. While its "Other Bets" category continued to post losses of over $1 billion, revenues from it were up year-over-year from $150 million to $262 million — and during 2016 as a whole, went up 82 percent to $809 million.
In a conference call the company's CFO, Ruth Porat, linked this to sales for Nest, Verily, and Google Fiber, according to Engadget. Nest — which makes smarthome products like thermostats and cameras — saw Black Friday and Cyber Monday sales nearly double.
In the same call Google CEO Sundar Pichai said that "early signs are promising" for the company's self-branded hardware, such as its Pixel phones, a challenger to Apple's iPhones. He singled out the Google Home — a smartspeaker like the Amazon Echo — as a "very popular present" during the holiday season.
Intel saw its quarterly profits drop 1.4 percent despite healthy sales, the Wall Street Journal said, reflecting trends for 2016 overall. The company's revenues were up 7 percent during the year, but net income was down 10 percent, something it blamed on one-time expenses in its normally profitable server chip business.
The company kicked up capital spending in general by 31 percent to $9.6 billion, and said it expects that to hit $12 billion in 2017, as it looks to make more efficient processors and memory, as well as "internet of things" components for the likes of self-driving cars.
PC chips did see double-digit profit growth, connected to high-end offerings as well as the company focusing investments elsewhere.
Intel has supplied desktop and laptop processors to Apple for over a decade. The company scored a recent coup, though, when it became a second modem supplier for the iPhone 7. It's not clear how much the chips are contributing to its bottom line, but Apple could lean even more heavily on Intel given lawsuits targeted against its other iPhone modem supplier, Qualcomm.