Imagine a Sunday in August; as the sunlight peeks through and the phone alarm goes off reminding the schedule of the week, you check the work mail to get the latest update. As you step outside, an Uber stops in front; you check Google Maps for your destination. Onboarding, you choose your Spotify playlist for the day before hitting hours in Dhaka traffic. In a small corner of the privileged arena of Dhaka city, this is the Scenario one is likely to face every weekday. Needless to say, from the moment we wake up to the moment we go to sleep, our lives are surrounded by technology. Be it a blessing or a curse, with the growth of population and breadth of digitalization, this has been undeniable.
An obvious answer appears when asked why tech giants continue to push themselves continuously, strengthening their reach not only on this planet but also in space. For any company, the thrust to meet up goals surrounds the concept of profitability- that is, the extent to which the company’s total income exceeds its total expenses for any given period. And for the tech giants, profitability also beats any other driving force behind running the companies. But there’s more to the matter than meets the eye. If profitability is the only factor that drives these tech giants to update themselves in every step and consumers are, then why are tech giants facing such a downfall?
The last two years have been the years of
After the pandemic of the 21st century resulted in a major shift in lifestyle and preferences, many companies experienced unexpected outcomes in shares. Where conventional companies suffered in loss, tech giants soared with progress. But in 2022, the picture was somehow different. Just after rebranding Facebook with Meta, Mark Zuckerburg faced a loss of a whopping 25%, over $200 billion off its value – facing the first-ever drop in daily user numbers. And Zuckerburg is not alone in the rough; Amazon, Google, and Tesla also followed the feat very shortly after.
The current Scenario
Tech companies saw their best days during the pandemic. With people locked down and working from home, spending time away from the screen was not an option. From the very necessary app Zoom to entertainment Mughal Netflix, all stood up front as the ones enjoying this pandemic growth. And seeing the opportunity, the investors were more than eager to invest in the tech companies. According to a report by CNBC on May 2022, prime companies like Microsoft, Apple, Tesla, Amazon, Alphabet, Meta Platforms, and Nvidia all have lost shares in the last trading sessions, and their cumulative loss counts as over $1 trillion. But not only the tech-heavy Nasdaq was seen suffering from such a downward pattern; our neighboring Indian tech hub was no exception to the issue. As per NDTV, in April, India’s second biggest IT firm, Infosys, witnessed its biggest fall in April 2022 since the start of the pandemic. Where big businesses like Wipro and TCS lost their progress, smaller ones like Tata Elxsi and Mastek were down bad as well.
Why such a downfall?
Multiple reasons can be pointed out when we dig deeper into the matter. From the microeconomic factor of preference shifts to the macroeconomic factor of inflation, tackling all at once is placing the tech companies in a difficult position to recover. Investors’ decision to move back from the tech hub was a major reason behind such a downfall. With Nasdaq taking restricted measures to fight inflation along with the crisis from the Ukraine -Russia war and increase in oil and gas prices did not help the case as well. With manufacturing parts unavailable per demand and logistics cost rising high, investors seemed to move to safer businesses without risking it all. Moreover, as people were moving offline, they had less time to interact on screen like back in the pandemic, so companies like Zoom or Netflix declined in consumer usage. The post-pandemic world brought a lot of lifestyle changes, so the new normal came as an adaptability challenge for the tech Mughals. But before even rethinking the strategies, the worsening economy took a toll on the tech business.
The Way Ahead
The trading year after two consecutive years of the pandemic was an opportunity to rebuild businesses. But the situation rather backfired for the global tech ecosystem. The way ahead for tech conglomerates depends heavily on the situation of the economy, which is not in a stable shape as of now. In a report released by the Bureau of Economic Analysis, it was seen that despite a year of rapid growth, the USA’s economy has unexpectedly shrunk at a 1.4% annualized rate in the first three months of 2022. But even with such drastic forecasts, companies are not losing hope for the future yet. To create a better product and service experience for the customers, tech giants are planning and investing in the future. Meta Platforms have already excited investors and a new generation of users with their Artificial Intelligence (AI) integrated Metaverse, the platform that promises a new mode of lifestyle. AI is already known as the concept of the future and Metaverse is just the portal that plants to grow by transforming the pre-existing concepts of advertising, e-commerce, entertainment, and education. But what about the other aspects of life, like healthcare? Google’s DeepMind artificial intelligence algorithm has already assured that. Google’s take on AI to determine the 3D shapes of proteins might just keep Google ahead of its competitors in the game. Besides that, Amazon and Microsoft are working to fight climate change, but in a futuristic way through technology to reduce emissions.
Witnessing such a spread in activities, it is seemingly easy to think that the tech giants are investing very far in the future. But with the growing population and the rapid flow of technological advancements, the future is hardly a far away discussion. The only question remains in adaptability. Investments are being made, and updates are on board with new dynamics of digitalization, but can the users adapt optimistically in this fragile economy? Are we ready for the future of tech lying ahead? Only time can tell!
Author -Subeh Tarek
