Seven of the Top 10 are Internet technology companies – namely, Apple, Google, Microsoft, Amazon, Facebook, Tencent and Alibaba – have a combined market value of $4.25 trillion, close to Japan’s GDP in 2016.
The leaders performed better than the market expected in Q3, but which is performing the best? This article uses Tencent’s unaudited Q3 financial report from four perspectives, revenue, net profit, business structure, and market value.
Revenue: Apple is About 5 Tencents or 6 Alibabas
In terms of revenue, Apple ranked first among the seven giants with $52.6 billion, although its growth rate was slower. Its revenue was equivalent to the sum of Amazon and Alibaba’s revenue, five times Tencent’s revenue or 6.34 times Alibaba’s.
Tencent today announced its Q3 revenue was 652 billion yuan ($98.497 billion), approaching that of Facebook with $10.3 billion.
Compared with the five major US tech giants, Alibaba and Tencent still have a lot of room to improve in terms of revenue, but its revenue growth was no less than 61 percent.
It’s worth noting that Alibaba saw its largest single-season growth rate since its IPO. As for Tencent, it has been seven years since the last time its quarterly revenue growth exceeded 60 percent.
Apple made more money than its competitors
Apple had a third-quarter net income of $10.7 billion, up by 19 percent from a year earlier.
Amazon, the second largest company, had the least net profit and the slowest growth in net profit, up by 1.6 percent from $252 million in the same period last year.
Alibaba had the highest revenue growth rate and the fastest-growing net profit growth rate index. Its Q3 net profit grew 146 percent over the same period last year from 7.142 billion yuan to 17.408 billion yuan ($2.616 billion).
Tencent, which just reported its Q3 net profits, also saw an increase of 18.06 billion yuan, up by 69 percent from a year earlier. In other words, Tencent made nearly 200 million yuan every day.
Tencent’s daily market value increase is about 640 million yuan
Tech stocks have been on a roll this year, and the share prices of the seven tech giants hit record highs recently, with Tencent and Alibaba the biggest beneficiaries, their stock more than doubling this year.
At the moment, Alibaba and Tencent have the same market value, exceeding $450 billion, narrowing the gap between the tech giants. That number is more than five Baidus, eight JD.coms and much more than the market value of NetEase, Sina and China’s other tech companies. Facebook and Amazon, like Alibaba and Tencent, have long been narrowing their market gap to only tens of billions of dollars.
Tencent had the fastest growing market value. Since going public, Tencent’s market capitalization has risen 530 times, or about $640 million a day, according to a rough estimate by 21st Century Data News Laboratory.
Tencent mobile game department has a revenue of 200 million yuan per day. Although famous for its App Store, more than half of Apple’s revenue comes from iPhones.
Tencent’s third-quarter revenue exceeded market expectations, with the biggest driver of growth being online gaming. Benefiting from the continued popularity of its mobile games, such as Honour of Kings, Tencent’s mobile game revenue was about 18.2 billion yuan in Q3, continuing to surpass PC gaming revenue.
At the same time, revenue from payment-related and cloud services increased by 143 percent to 120.44 billion yuan in Q3. By the end of Q3, the number active users on WeChat was 980 million.
The most profitable business for Apple was still the iPhone, and iPhone revenue reached $28.846 billion in Q3 of 2017. That cannot be attributed to the iPhone 8, which went on sale less than half a month ago.
In terms of sales, the iPhone sold 46.68 million units in Q3, a 3 percent increase year-on-year, which was basically the same as in Q2. Its other hardware products are even brighter. Mac, iPad and the Apple Watch had revenue growth as high as 50 percent.
Microsoft’s business sector has been relatively average, with nearly $9.4 billion in PC revenue, slightly down from last year. Its smart cloud business grew strongly, with revenue of $6.92 billion, up by nearly 14 percent year-on-year.
Advertising revenue, by contrast, is a pillar of Facebook and Google. Facebook relies on advertising for 98 percent of its revenue, up 49 percent from a year earlier to $10.42 billion. Mobile advertising revenue continues to rise.
The e-commerce platform Alibaba, which enjoyed a record-setting Single’s Day transaction record, also recorded its highest revenue growth since its IPO. Although Single’s Day revenue was not included in the results, Alibaba’s most profitable business was still its core of e-commerce, which accounted for 84 percent of its revenue in Q3. Cloud computing, digital entertainment, innovation and other businesses are still losing money.
Amazon’s revenue is about five times Alibaba’s. Its eye-catching cloud services revenue was $4.6 billion, still maintaining fast growth momentum to become Amazon’s most profitable business.