The shortage of human and electronic resources threatens the growth of Amazon and Apple

The profit figures prove that the will of the two giants is still strong.

Leadership continues despite difficulties

The lack of human and electronic resources hinders the growth of technology giants such as Amazon and Apple, as it is difficult for them to achieve their production goals and more profits in light of the difficulties in employment and the scarcity of electronic chips caused by the disruptions caused by the pandemic, however, the two giants show a strong will to overcome this crisis to maintain leadership.

Amazon and Apple are struggling with hiring difficulties and a shortage of semiconductors, threatening the growth of the two giants despite their fourth-quarter revenue reaching tens of billions of dollars.

The results of the two American groups disappointed investors, and their securities lost more than 3 percent during electronic trading after the New York Stock Exchange closed.

And Amazon, which is struggling to find staffing, generated third-quarter revenue of $110.8 billion (+15 percent), in line with its forecast but not those of analysts who had forecast more than $111.6 billion.

Tim Cook: The global chip shortage has affected all sectors of the industry, not just Apple

Amazon made $3.2 billion in net profit after tripling its profits in one year to $6.3 billion thanks to the health crisis and annual sales.

In its statement, the American group highlighted its many investments, stressing that it had "almost doubled its warehouse network since the beginning of the epidemic."

The number of Amazon workers reached 1.5 million people in the world, which is 30% more than last year, and the company continues to hire to meet the ever-increasing demand, despite the lifting of restrictions imposed to combat Covid-19 in many countries. However, the tension in the US market is hindering the company's growth.

"In the fourth quarter of the year, we expect additional costs of several billion in terms of selling our business to consumers," Amazon noted, noting "a workforce shortage, higher wages, global supply issues, and higher transportation costs."

About ten days ago, the group expressed its plan to employ 150,000 seasonal workers during the end of the year holidays, in addition to 165,000 jobs announced in September.

The price of oil and the scarcity of electronic semiconductors also affect the company's activities, as is the case for Apple.

According to CEO Tim Cook, when presenting the results, Apple estimates it lost about $6 billion between July and September, due to "larger-than-expected supply constraints." 

Apple suffers from a “silicon shortage”, a basic material for manufacturing electronic chips, knowing that this shortage affects the entire consumer electronics sector. It also suffers from "pandemic disruptions" at the group's factories in Southeast Asia.

"We live in an unprecedented era," Cook emphasized.

Cook expects that losses during the current quarter, which includes the holiday period, will be higher than those recorded during the summer.

It is unlikely that Apple will be able to meet its production targets for the new iPhone before the holiday season due to the global shortage of electronic chips, according to recent reports.

Apple is also facing pressure from regulators and software developers to cut commissions on the App Store.

Cook acknowledged that the global shortage of chips had an impact on all sectors of the industry, not just Apple, due to the massive demand higher than expectations.

In total, revenue was $83.3 billion, an increase of 29 percent from iPhone sales.

iPhone sales increased by 47% in one year. Throughout its activity in the 2020-2021 season (October to September), Apple sold smartphones for a total of $191.9 billion in revenue, more than a third of what it sold before the pandemic.

Apple is also facing pressure from regulators and software developers to cut its commissions on the App Store, the only outlet for its highly sought-after mobile devices worldwide.

Wedbush analyst Dan Ives, who is optimistic about Apple's plan through the end of the year and beyond, says the numbers show the will is still strong.

Amazon chief financial officer Brian Olsavsky said during an analyst conference that staffing and issues at it cost the group about $2 billion this summer, and those costs could double this quarter.

Olsavsky still expects sales of between $130 billion and $140 billion for the fourth quarter (ie a growth of 4 to 12 percent within one year).

Andrew Lipsman of iMarketer concludes, "The fragile outlook would be even more worrisome if Amazon wasn't used to outperforming expectations over the holidays."