Tech Giants Growing Market Value During COVID-19 Pandemic
Global tech giants are taking advantage of the numerous business opportunities that the COVID-19 pandemic is opening up across the globe.
This was evident in the second quarter financial reports of the top 25 technology companies that saw the market capitalisation of the companies expanding quarter-on-quarter during a global health crisis.
According to the Data compiled by GlobalData, Apple’s second-quarter revenue was aided by the strong performance from its services and wearables business units despite COVID-19 disruption. This, according to the data, allowed the tech giant to gain substantial market share and emerged as the world’s most valuable company.
Speaking on the strong financial statements from global tech giants, Keshav Jha, Business Fundamentals Analyst at GlobalData, said: “Apart from its impressive Q2 performance, the announcement of the new iOS and new iMac during Apple’s annual developer conference (WWDC) in June 2020 seemed to have pleased investors with the company’s MCap rising by over 40% during the quarter.
“The second of the top 25 technology companies by MCap was Microsoft. The company’s business accelerated during the company’s Q3 ending March 31 2020 mainly driven by growth in its cloud usage, increased Xbox sales, and higher demand for Office commercial and Dynamics business solutions. The company’s decision to close its physical stores and invest in e-commerce operations to drive sales, as well as the announcement of regular quarterly dividend, helped its stocks reach a new high.
“In third place was Amazon Web Services (AWS), which recorded a huge surge in demand of its cloud services after the COVID-19 outbreak. Additionally, an increase in e-commerce retail demand due to lockdowns imposed by governments in major economies helped Amazon’s stock rise over 40% and its MCap crossed US$1 trillion mark in Q2 2020.”
Alphabet, Facebook and Tencent led in the digital advertising space with over 20 percent quarter-on-quarter growth in their market capitalisation. The report noted that in the last three weeks of Q1 2020, advertisement revenue of Alphabet and Facebook dipped slightly but started showing stability in the first three weeks of April.
This renewed interest in the advertisement of the two companies aided their stocks by 20 percent in April as investors remained strongly bullish due to an increase in consumer engagement on its services because of the quarantine and shelter-in-place orders.
Jha continued: “Although suspension of sports events affected Tencent’s media advertising revenue, its online advertisement and games revenues increased over 30% in Q1 2020, ended March 31, which seemed to help the company win over investors’ confidence.”
For major semiconductor companies such as Samsung, Taiwan Semiconductor, NVIDIA, ASML, Broadcom, Texas Instruments and Qualcomm their market value grew between 9 percent to 45 percent quarter-on-quarter during the period.
Jha adds: “The health crisis led to rise in demand for memory chips, mainly due to higher demand from cloud applications linked to remote working and online education. The continued investment in AI, 5G infrastructure, data center, autonomous vehicles and gaming also kept market interested in these stocks.”
While ServiceNow and Zoom were the two entrants on the GlobalData’s top 25 technology companies ‘my MCap list’. They both grew subscription revenues and widening customer base with ServiceNow closing 37 deals in the first quarter. Zoom usage surged by 75.6 percent quarter-on-quarter in the second quarter of 2020.
Jha concludes: “The economic downturn caused by COVID-19 has impacted all sectors, but the performance of tech stocks in Q2 suggests that investors believe they can successfully manage the headwinds from the health crisis. Tech companies are uniquely positioned to provide technology and resources to organizations and partners, which help in securely accessing and sharing data while working remotely. These companies are also playing pivotal role for consumers coping with lockdown measures, and in enabling health institutions and governments to maintain databases, which help in containing the spread of virus.”
Please note that the technology companies include software and hardware developers, IT services providers (including internet-based services providers), and electronics manufacturers including semiconductors, mobile devices etc.
Facebook to Open Office in Lagos, Nigeria
Social Media Giant Facebook Will Open a New Office in Nigeria
Facebook Inc, the world’s biggest social media company, on Friday announced it will open a new office in Lagos, Nigeria. The second of such in Africa.
According to the company, the office will be home to various facebook teams, servicing the African continent in Sales, Partnerships, Policy, Communications as well as Engineers.
The new office is expected to be operational in the second half of 2021 and will be the first in Africa to house a team of expert engineers building for the future of Africa and beyond.
Speaking on the new office, Ime Archibong, Facebook’s Head of New Product Experimentation, said: “The opening of our new office in Lagos, Nigeria presents new and exciting opportunities in digital innovations to be developed from the continent and taken to the rest of the world. All across Africa we’re seeing immense talent in the tech ecosystem, and I’m proud that with the upcoming opening of our new office, we’ll be building products for the future of Africa, and the rest of the world, with Africans at the helm. We look forward to contributing further to the African tech ecosystem.”
The investment of the new Facebook office follows the 2018 opening of NG_Hub, its first flagship community hub space in Africa in partnership with CcHub, and the 2019 opening of a Small Business Group (SBG) Operations Centre in Lagos, in partnership with Teleperformance. Providing outsourced support to all English-speaking advertisers across Sub-Saharan Africa, the SBG office supports Small Medium Businesses (SMBs) through its Advocacy, Community & Education (ACE) programme, as well as its Marketing Expert sales programmes – all aimed at enabling SMBs to accelerate the growth and development of their businesses.
“Our new office in Nigeria presents an important milestone which further reinforces our ongoing commitment to the region”, commented Kojo Boakye, Facebook’s Director of Public Policy, Africa. “Our mission in Africa is no different to elsewhere in the world – to build community and bring the world closer together, and I’m excited about the possibilities that this will create, not just in Nigeria, but across Africa.”
Since the opening of its first office in 2015, Facebook has made a number of investments across the continent, aimed at supporting and growing the tech ecosystem, expanding and providing reliable connectivity infrastructures and helping businesses to grow locally, regionally and globally. This includes the recent rollout of its SMB Grants programme in Nigeria and South Africa, aimed at supporting over 900 businesses by providing a combination of cash and ad credits to help small businesses as they rebuild from COVID. The development of 2Africa, the world’s largest subsea cable project that will deliver much needed internet capacity and reliability across large parts of Africa, as well as its ongoing training programmes across the continent which support various communities including students, SMBs, digital creatives, female entrepreneurs, start-up’s and developers.
Nunu Ntshingila, Regional Director, Facebook Africa, said: “We’re delighted to be announcing our new office in Nigeria. Five years on from opening our first office on the continent in Johannesburg, South Africa, we’re continuing to invest in and support local talent, as well as the various communities that use our platforms. The office in Lagos will also be key in helping to expand how we service our clients across the continent.”
Senator Rubio Urges Trump to Scrap TikTok-Oracle Deal if ByteDance Ties Remain
Marco Rubio and five other Republican senators called on the Trump administration to reject a proposed deal for Oracle Corp ORCL.N to become a “trusted technology provider” for popular social media platform TikTok’s U.S. operations, if ties to Chinese owner ByteDance remain.
Rubio, the first senator to call on the administration to investigate TikTok over censorship concerns, said in the letter to President Donald Trump that “serious questions” remained about Oracle’s role, the technology it would provide to ByteDance, and the future of the application’s algorithm.
“We remain opposed to any deal that would allow China-based or controlled entities to retain, control or modify the code or algorithms that operate any U.S.-based version of TikTok,” Rubio wrote in the letter, dated Wednesday.
“We are heartened that this deal still requires government approval, and if reports indicating this proposed deal will retain links to ByteDance or other Chinese-controlled entities, we strongly urge the administration to reject such a proposal on national security grounds,” he added.
Late on Wednesday, Senator Ted Cruz raised concerns about a deal, saying in a separate letter the Oracle ByteDance deal “failed to meet the intent of the president’s executive orders” and “raises serious national security concerns.”
The Trump administration will make a decision soon on Oracle becoming a trusted technology provider, White House press secretary Kayleigh McEnany said on Wednesday.
The Rubio letter, also signed by Senators Thom Tillis, Rick Scott, John Cornyn, Roger Wicker and Dan Sullivan, is part of a growing chorus of lawmakers raising questions about the deal.
On Monday, Republican Senator Josh Hawley sent a letter to Treasury Secretary Steve Mnuchin, who heads a national security panel reviewing the proposal, calling for the deal to be scuttled, if it does not allow for the “full emancipation of TikTok software from potential Chinese Communist Part control.”
It is unclear what Trump will do. White House adviser Jared Kushner on Tuesday said the White House is reviewing Oracle’s bid and a senior administration official said a decision had not yet been made.
Trump had previously made clear he sought a full-scale sale of the app to an American technology company, amid concerns among national security officials that ByteDance could provide American user data to the Chinese government. But Trump may not want to alienate 100 million-odd American TikTok users weeks before a hotly contested presidential election.
Trump has also said he is a fan of Oracle’s co-founder and Chairman Larry Ellison, one of few tech executives to openly support the Republican president.
Meanwhile, China has updated its export control rules to give it a say over the transfer of technology, such as TikTok’s recommendation algorithm, to a foreign buyer. Chinese officials have said ByteDance should not be coerced by the United States into a deal.
Oracle announced on Monday it was part of a proposal submitted by ByteDance to the U.S. Treasury Department to serve as “trusted technology provider,” to ByteDance, providing no further details on the terms of the deal.
Pandemic Has Spurred Need for Digital ID Systems to Reduce Physical Contact
Digital ID systems, a prerequisite for developing functional e-governance platforms, have been on the agendas of many emerging economies for quite some time.
However, the COVID-19 pandemic has reemphasized the importance of eIDs in providing social, medical and financial support to households and businesses.
Electronic identification allows citizens and businesses to prove their identity and access the governmental services online. It enables fully digital processes and eliminates the need for expensive and time-consuming manual operations. Such functionality has been crucial during the pandemic, especially for developing countries.
For example, in April Chile pre-enrolled millions of new recipients in social welfare programs, while Thailand, where over 28 million people applied for a new benefit for informal workers affected by the pandemic, filtered out those who had already received assistance from other projects. All of this, including the improved accessibility to medical services, has helped to mitigate the impact of COVID-19 on both the economy and the people.
“The pandemic has put electronic identification at the top of the priority lists of many developing countries,” said Mindaugas Glodas, CEO at NRD Companies, a global IT consortium specializing in e-solutions developing and consulting. “It has become a necessary component of digital transformation initiatives for governments around the world, ensuring transparency, security and efficiency of e-public services they are eager to deliver to citizens. The importance of eIDs will only grow in the coming years.
“However, while economies are steadily moving towards digitization, more than a billion people, half of them in Africa, still lack basic unique IDs—a precondition for citizens to exercise the range of human rights set out in international laws and conventions. In the absence of identification systems, people have difficulties opening bank accounts, voting, obtaining formal employment and accessing education or healthcare, while states themselves struggle with government administration, tax collection, response to emergencies, disasters and epidemics, border management and security,” said Mindaugas Glodas.
One of the developing nations that has recognized the importance of unique and digital ID systems is Samoa, previously one of the least digitized countries in the world. Working together with NRD Companies, the Polynesian country has been determined to bring its people an accessible and highly secure identity management system. When the pandemic first hit, the Samoan government decided to continue with the consultancy project remotely even in unfavorable circumstances—a move that speaks to the urgent need for innovation. The new project is expected to help support the economic recovery and serve as a foundation for a digital government platform.
According to Vaidotas Ramonas, a digital identity, electronic signature and trust services expert, identification is the basis for building inclusive societies, where every individual has access to services provided by the state with no one left behind. Once countries have implemented unique ID frameworks, the next logical step is to introduce digital ID systems. There are multiple paths governments can take to initiate and encourage the use of eID platforms.
“The government can start providing eID services by, for example, digitizing some of the most widely-used, costly or inconvenient-to-use public services—ice-breakers, as I call them,” said Vaidotas Ramonas. “Digitization would make the services cheaper, easier and faster to use, which could possibly attract more people to try them out. Also, the government can simply announce, independently, that some service will be available only through e-government for which the citizens will need to set up eIDs. It is possible that at first there will be some discontentment, but experience shows that people eventually see that eID saves time, money and energy, and later refuse to give it up.”
As emerging nations tackle the COVID-19 pandemic and rebuild their economies, they have a unique opportunity to use the crisis as a springboard and introduce innovative digital solutions. With all of the advantages it brings to the table, building unique ID infrastructure is a good place to start a journey toward national eID platforms.
NRD Companies, with the support from its global partners—such as the World Bank, AfDB, European Commission and others—often organizes govtech-related events seeking to educate policy makers and encourage sustainable change. The next event, an international webinar on national digital identity, is scheduled for September 17th. However, for those unable to attend, the company is more than happy to share a link to watch the event at a later time, thus encouraging any interested peers to reach out.
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