It took a few years but what do you see all over town? The iPod Earbuds Effect. Watch is everywhere and nobody else’s smartwatch is anywhere; yet Watch is a baby business. How does that change compare to Google’s latest baby business?
The Cloud Is Cloudy
It seems as if everybody has a cloud business these days. Amazon, Microsoft, Dropbox, and, yes, Google and Apple. The iPhone maker treats iCloud as a feature service more than a for-profit business, but the latest news says Google Cloud is a serious business that could give Amazon and Microsoft a run for their money.
Whose money? Larry Dignan did the digging. How are Google and Amazon’s respective cloud businesses doing?
Google Cloud is on a $8 billion annual revenue run rate as Amazon Web Services pushes the $33 billion run rate mark in what amounts to a burst of disclosure for customers to ponder.
Run rate is a business term which loosely means growing in one quarter at a rate that could be annualized. A $2-billion quarter means an $8-billion run rate.
What about Amazon?
AWS reported second quarter revenue of $8.38 billion with operating income of $2.12 billion.
Since nobody else compares Apple to apples I’m not going to do that here, either. Instead, let’s compare Apple to oranges and highly hyped businesses from Google and Amazon to the business everybody thought would fail.
Nobody gives out much detail on what sells these days, Apple included (even Microsoft won’t divulge how many Surface PCs were sold or how well cloud service Azure is doing), but I get it. Numbers are important and technology companies do well to keep them close to the vest.
Still we have guesstimators and one of the best says Apple sold about 24-million Watches last year, and this year might sell 33-million. UBS last year:
UBS believes Apple will ship around 24 million Apple Watches across 2018 which includes Series 1, Series 3, and some Series 4 sales. UBS expects the Apple Watch market to grow even more next year, however, with a 40% year-over-year increase to about 33 million watches sold across the year predicted.
That means Apple’s Watch business last year was far better than Google’s highly touted and rapidly growing Cloud business. I figured an average unit price of $400 for Apple Watch, and multiplied it times 24-million, to arrive at $9.6-billion. Last year.
This year is more than half over, but guesstimates don’t care, so 33-million Watches sold could bring Apple $13.2-billion in revenue, or, put another way, just less than half of Amazon’s holier-than-thou cloud services which has members of the technorati elite politburo constantly kissing Jeff Bezos’ patootie.
That means Google’s Cloud is not even up to Watch-size standards, and Amazon’s cloud services are not growing as fast as Apple Watch.
See? This lies, damned lies, and statistics thing can be used every which way from Sunday to make a point.
Oh. What’s the point?
Apple’s Watch business is doing OK by any measure.