Tale of two companies: Apple's profit and Amazon's loss

Apple made $8bn profit last quarter, while Amazon lost $28m. Yet the two companies are treated as equally successful. Why?

Two giants of the technology world posted their quarterly results yesterday evening, with the differences highlighting the gulf between them – both in finances, and perceptions.

Apple's earnings report for the fourth quarter 2012 showed an $8.2bn profit on $36bn in revenue. This is a new Q4 record for the company, topping this quarter last year when it earned $6.62bn profit on $28.27bn revenue. The gains were largely due to an increase in stock shipped: iPad sales went from 11m to 14m, and iPhone sales from 17m to 26.9m, both year-on-year (the figures don't include the iPhone 5 to any significant degree, which was only on sale for the last nine days of the quarter). The rest of Apple's business held largely flat, with the exception of the iPod line which continued losing share to smartphones. The average gross margin, in particular, was essentially unchanged at 40 per cent.

At the other end of the West Coast, in Seattle, Amazon announced its results. Net sales were up 27 per cent year-on-year, at $13.81bn – but operating income fell to a loss of $28m, down from the $79m profit it made last year. That loss wasn't unexpected – the company had been warning that it expected a loss of between $50m and $350m – but it reaffirms the image of Amazon as a company unconcerned with profit.

Much of the money has been spent on heavy investment, and the Verge writes that Amazon Web Services and Kiva Systems have been particular beneficiaries of the spending. The former is the spin-off from the company's core business, and provides web services – hence the name – to a number of other companies, ranging from garage start-ups to behemoths like Reddit. That business suffered a blow earlier this week when it experienced a sustained outage, which underscores the need for further investment.

Kiva Systems is Amazon's recently-acquired robotic warehouse-management system. Depending on how cool you find robots in warehouses, it does pretty cool stuff for Amazon's productivity, but has yet to be put into widespread usage.

Despite the fact that these results are as different as night and day, reaction to both was muted. Apple failed to meet the guesses made by Wall Street, which had forecast even higher sales particularly of iPads. The Q3 results were artificially depressed by the lack of availability of the then-new first generation retina iPad, and some were expecting a bigger bounce back from that than there actually was.

There was also disappointment in financial sectors about Amazon's performance. This is the second quarter running in which the company has posted a loss, despite sales in the tens of billions, and many investors are starting to wonder if the company really is preparing for profit, or if this is the way Amazon will always be run.

I wrote last week about the ways Amazon could be planning to get into profit, and they all boil down to dominating a market. Either the company's expansion into same-day delivery allows it to conclusively deal the killing blow to traditional retail; or it's domination of book selling allows it to bully publishers into handing over ever greater shares of the margin; or its new Kindles allow it to move low-margin sales of physical media over to high-margin sales of digital media.

At the time, I worried about the pitfalls that lay in the way of each of those aims, but it looks like there might be a new one: if Amazon's investors see many more quarters like these last two, they may not stick around for the promised light at the end of the tunnel.

The Grand Central Apple Store, a recent opening by the company. Photograph: Apple

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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I can’t follow Marie Kondo's advice – even an empty Wotsits packet “sparks joy” in me

I thought I’d give her loopy, OCD theories a go, but when I held up an empty Wotsits bag I was suffused with so many happy memories of the time we’d spent together that I couldn’t bear to throw it away.

I have been brooding lately on the Japanese tidying freak Marie Kondo. (I forgot her name so I typed “Japanese tidying freak” into Google, and it was a great help.) The “Japanese” bit is excusable in this context, and explains a bit, as I gather Japan is more on the case with the whole “being tidy” thing than Britain, but still.

Apart from telling us that we need to take an enormous amount of care, to the point where we perform origami when we fold our underpants, which is pretty much where she lost me, she advises us to throw away anything that does not, when you hold it, “spark joy”. Perhaps I have too much joy in my life. I thought I’d give her loopy, OCD theories a go, but when I held up an empty Wotsits bag I was suffused with so many happy memories of the time we’d spent together that I couldn’t bear to throw it away.

After a while I gave up on this because I was getting a bit too happy with all the memories, so then I thought to myself, about her: “This is someone who isn’t getting laid enough,” and then I decided that was a crude and ungallant thought, and besides, who am I to wag the finger? At least if she invites someone to her bedroom no one is going to run screaming from it, as they would if I invited anyone to my boudoir. (Etym: from the French “bouder”, to sulk. How very apt in my case.) Marie Kondo – should bizarre circumstance ever conspire to bring her to the threshold – would run screaming from the Hovel before she’d even alighted the stairs from the front door.

I contemplate my bedroom. As I write, the cleaning lady is in it. To say that I have to spend half an hour cleaning out empty Wotsits packets, and indeed wotnot, before I let her in there should give you some idea of how shameful it has got. And even then I have to pay her to do so.

A girlfriend who used to be referred to often in these pages, though I think the term should be a rather less flippant one than “girlfriend”, managed to get round my natural messiness problem by inventing a game called “keep or chuck”.

She even made up a theme song for it, to the tune from the old Spiderman TV show. She would show me some object, which was not really rubbish, but usually a book (it may not surprise you to learn that it is the piles of books that cause most of the clutter here), and say, “Keep or chuck?” in the manner of a high-speed game show host. At one point I vacillated and so she then pointed at herself and said, “Keep or chuck?” I got the message.

These days the chances of a woman getting into the bedroom are remote. For one thing, you can’t just walk down the street and whistle for one much as one would hail a cab, although my daughter is often baffled by my ability to attract females, and suspects I have some kind of “mind ray”. Well, if I ever did it’s on the blink now, and not only that – right now, I’m not even particularly bothered that it’s on the blink. Because, for another thing, I would frankly not care to inflict myself upon anyone else at the moment.

It was all a bit of a giggle eight years ago, when I was wheeled out of the family home and left to my own devices. Of course, when I say “a bit of a giggle”, I mean “terrifying and miserable”, but I had rather fewer miles on the clock than I do now, and a man can, I think, get away with a little bit more scampish behaviour, and entertain a few more illusions about the future and his own plausibility as a character, when he is squarely in his mid-forties than when he is approaching, at speed, his middle fifties.

Death has rather a lot to do with it, I suppose. I had not actually seen, or touched, a dead body until I saw, and touched, my own father’s a few weeks ago. That’s what turns an abstract into a concrete reality. You finally put that to one side and gird up your loins – and then bloody David Bowie snuffs it, and you find yourself watching the videos for “Blackstar” and “Lazarus” over and over again, and reach the inescapable conclusion that death is not only incredibly unpleasant, it is also remorseless and very much nearer than you think.

And would you, dear reader, want to be involved with anyone who kept thinking along those lines? I mean, even if he learned how to fold his undercrackers into an upright cylinder, like a napkin at a fancy restaurant, before putting them in his drawer? When he doesn’t even have a drawer?

Nicholas Lezard is a literary critic for the Guardian and also writes for the Independent. He writes the Down and Out in London column for the New Statesman.

This article first appeared in the 05 February 2015 issue of the New Statesman, Putin's war