Apple Inc. (NASDAQ:AAPL) and Facebook Inc. (NASDAQ:FB) will report quarterly earnings this week that underscore the technology industry’s division into two camps: providers that are adapting to shifting mobile and Web tastes, and those that have lagged behind.
Apple later today is predicted to report a rise in iPhone sales after last month’s release of new models, while Facebook follows on Oct. 30 with some analysts projecting a bigger chunk of its revenue to come from mobile advertising.
Google Inc., Amazon.com Inc. and Samsung Electronics Co. -- companies that have helped pioneer mobile and Internet-based services -- have released results that have surpassed estimates in the past two weeks. By contrast, those struggling to adapt to the changes have reported earnings that disappointed investors. They include International Business Machines Corp., Yahoo! Inc., and security-software company Symantec Corp.
“Many of the old-guard companies are being displaced and the companies that are at the advent of these forces are becoming dominant,” said Van Baker, director of research at Gartner Inc.
Microsoft Corp.’s results last week show that the divide between haves and have-nots can exist within the same company. The Redmond, Washington-based software maker made up for the shortcomings in its consumer personal-computer business with better-than-predicted numbers for corporate programs like Internet telephone and messaging software, and by more than doubling sales from business cloud services like online versions of Office and the Azure service for hosting applications on the Web.
Investors are rewarding the companies disrupting their industries and leading the new trends. Google surpassed $1,000 a share for the first time after reporting results, and Amazon also jumped 9.4% a day after posting its earnings. The stocks, up 44% and 45% respectively this year, have outpaced the 23% gain in the S&P 500 Index. IBM declined 7.7% in the same period.
“The new tech companies like Google and Amazon did well, while companies that rely on old tech, like IBM, didn’t,” said Daniel Morgan, a fund manager at Synovus Trust Co. in Atlanta, which owns Microsoft shares.
The popularity of smartphones, tablets and tools that let people to work, shop or watch videos from anywhere with an Internet connection has upended a technology industry that long profited from a model of selling PCs and accompanying software.