Prakash Kolli, Wealth of Geeks
The top five American technology companies are worth trillions. Microsoft, Apple, Nvidia, Alphabet (Google), and Amazon have more than $12 trillion in market capitalization.
That’s larger than the Gross Domestic Product (GDP) of every country in the world except the United States and China. Their combined revenue is $1.5 trillion, and they employ millions of people.
The technology sector drives the American economy and creates wealth for shareholders and employees. However, that market domination is sometimes at the expense of other companies.
Moreover, they control key products and services and influence public policy. Their size and influence have arguably given them a unique place in the global and U.S. economies. However, both characteristics have brought increased scrutiny, leading to the question, are they now too big?
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Too-large tech companies lead industry
American tech brands have the upper hand in the battle for market leadership and profitability. Consequently, their reach encompasses most businesses and consumers. Despite their overwhelming presence, many already-immense tech companies continue to expand.
Microsoft is the largest company in the world, comprising nearly 30% of the operating system market share. Microsoft has become indispensable for business and pleasure. An estimated 1.6 billion devices utilize Windows, 100 million gamers use Xbox, 70% of companies use Azure, 259 million users work with Office 365, 270 million users are on Teams, and at least 1 billion professionals worldwide lean on LinkedIn.
Apple products comprise about 60% of U.S. smartphone sales, a percentage continually rising at the expense of other smartphone manufacturers. The brand shipped 235 million iPhones in 2023; 20% of the global market. Because smartphones often last years and many smartphone users express brand loyalty, Apple’s App Store brims with 2.23 million apps and games, adding an extra $89 billion in sales.
Similarly, Nvidia dominates the graphics processing unit (GPU) market with a 92% share. Gaming computers, data centers, networking, and artificial intelligence utilize Nvidia chips.
Alphabet’s Android operating system controls about 70% of the global mobile phone market. Google Search is utilized in 90% of all internet queries, resulting in 8.5 billion daily requests.
Amazon controls more than 40% of the United States e-commerce market and delivers nearly 5 billion packages annually. The company is also a leading cloud software as a service provider, controlling one-third of the market.
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Investors benefit from market leadership and growth
Shareholders generally benefit from tech company growth and market dominance, though some economic hurdles — the dot-com crash, the Great Recession, and other bear markets — made many present-day investors’ journey to wealth a bumpy one.
Although tech stocks are not known for their dividends, Microsoft’s 2012 move increased the dividend annually, making it a desired equity for those following a dividend growth strategy. Other big tech brands, like Apple, Amazon, Meta Platforms, Alphabet, and Nvidia, have similar stories. Investors who bought early and held on would have benefitted exponentially.
—————
Market dominance brings increased scrutiny
Entities and individuals continue to utilize many prominent tech brands’ devices and services. Smartphones’ ability to streamline professional and personal schedules and connect users worldwide puts these products atop consumers’ priority lists regardless of profession.
Backyard Garden Lower ‘s Adriana Copanceanu says, “While smartphones can sometimes interfere with important life moments, they also make everything easier: from being able to communicate with family and friends all over the world to doing business on the run and finding on-the-spot answers to a stumping question.”
E-commerce and its time-saving nature are similarly popular. However, consumers are increasingly aware of market monopolizing. Some one-time fans of these billion-dollar brands view their now-overwhelming size negatively.
A September 2023 poll asked Americans, “When thinking about the power of Big Tech companies (like Google, Amazon, and Meta) in the market, which of the following statements comes closer to your view, even if neither is exactly right?”
60% of respondents said, “These companies have too much power in the market, which puts competitors at a disadvantage and hurts both smaller businesses and consumers.” Only 30% picked, “These companies showcase the best of American innovation and capitalism, and are deserving of the profits and market power they have achieved.” The rest were undecided.
Market monopolization has led to increased government observation and scrutiny. The federal government, alongside a coalition of state attorneys general, initiated an antitrust case against Google. The proceedings will take around 10 weeks.
Other assertive government moves against big tech companies include the Federal Trade Commission’s (FTC) antitrust case against Meta Platforms. Meta’s acquisition of WhatsApp and Instagram rang monopolization alarm bells. Additionally, the FTC and 17 state attorneys general are suing Amazon.
—————
Are some tech companies too big?
Consumers and businesses benefit from the tech industry’s innovation and growth. As a result, these brands become sizable firms with valuations in the trillions. However, size and market dominance bring increased scrutiny, and consumers and governments are rethinking the acceptability of their overwhelming market presence.
Similar consumer concerns and scrutiny regarding top U.S. banks after the subprime mortgage crisis and the Great Recession resulted in increased regulation and reporting.
That’s larger than the Gross Domestic Product (GDP) of every country in the world except the United States and China. Their combined revenue is $1.5 trillion, and they employ millions of people.
The technology sector drives the American economy and creates wealth for shareholders and employees. However, that market domination is sometimes at the expense of other companies.
Moreover, they control key products and services and influence public policy. Their size and influence have arguably given them a unique place in the global and U.S. economies. However, both characteristics have brought increased scrutiny, leading to the question, are they now too big?
—————
Too-large tech companies lead industry
American tech brands have the upper hand in the battle for market leadership and profitability. Consequently, their reach encompasses most businesses and consumers. Despite their overwhelming presence, many already-immense tech companies continue to expand.
Microsoft is the largest company in the world, comprising nearly 30% of the operating system market share. Microsoft has become indispensable for business and pleasure. An estimated 1.6 billion devices utilize Windows, 100 million gamers use Xbox, 70% of companies use Azure, 259 million users work with Office 365, 270 million users are on Teams, and at least 1 billion professionals worldwide lean on LinkedIn.
Apple products comprise about 60% of U.S. smartphone sales, a percentage continually rising at the expense of other smartphone manufacturers. The brand shipped 235 million iPhones in 2023; 20% of the global market. Because smartphones often last years and many smartphone users express brand loyalty, Apple’s App Store brims with 2.23 million apps and games, adding an extra $89 billion in sales.
Similarly, Nvidia dominates the graphics processing unit (GPU) market with a 92% share. Gaming computers, data centers, networking, and artificial intelligence utilize Nvidia chips.
Alphabet’s Android operating system controls about 70% of the global mobile phone market. Google Search is utilized in 90% of all internet queries, resulting in 8.5 billion daily requests.
Amazon controls more than 40% of the United States e-commerce market and delivers nearly 5 billion packages annually. The company is also a leading cloud software as a service provider, controlling one-third of the market.
—————
Investors benefit from market leadership and growth
Shareholders generally benefit from tech company growth and market dominance, though some economic hurdles — the dot-com crash, the Great Recession, and other bear markets — made many present-day investors’ journey to wealth a bumpy one.
Although tech stocks are not known for their dividends, Microsoft’s 2012 move increased the dividend annually, making it a desired equity for those following a dividend growth strategy. Other big tech brands, like Apple, Amazon, Meta Platforms, Alphabet, and Nvidia, have similar stories. Investors who bought early and held on would have benefitted exponentially.
—————
Market dominance brings increased scrutiny
Entities and individuals continue to utilize many prominent tech brands’ devices and services. Smartphones’ ability to streamline professional and personal schedules and connect users worldwide puts these products atop consumers’ priority lists regardless of profession.
Backyard Garden Lower ‘s Adriana Copanceanu says, “While smartphones can sometimes interfere with important life moments, they also make everything easier: from being able to communicate with family and friends all over the world to doing business on the run and finding on-the-spot answers to a stumping question.”
E-commerce and its time-saving nature are similarly popular. However, consumers are increasingly aware of market monopolizing. Some one-time fans of these billion-dollar brands view their now-overwhelming size negatively.
A September 2023 poll asked Americans, “When thinking about the power of Big Tech companies (like Google, Amazon, and Meta) in the market, which of the following statements comes closer to your view, even if neither is exactly right?”
60% of respondents said, “These companies have too much power in the market, which puts competitors at a disadvantage and hurts both smaller businesses and consumers.” Only 30% picked, “These companies showcase the best of American innovation and capitalism, and are deserving of the profits and market power they have achieved.” The rest were undecided.
Market monopolization has led to increased government observation and scrutiny. The federal government, alongside a coalition of state attorneys general, initiated an antitrust case against Google. The proceedings will take around 10 weeks.
Other assertive government moves against big tech companies include the Federal Trade Commission’s (FTC) antitrust case against Meta Platforms. Meta’s acquisition of WhatsApp and Instagram rang monopolization alarm bells. Additionally, the FTC and 17 state attorneys general are suing Amazon.
—————
Are some tech companies too big?
Consumers and businesses benefit from the tech industry’s innovation and growth. As a result, these brands become sizable firms with valuations in the trillions. However, size and market dominance bring increased scrutiny, and consumers and governments are rethinking the acceptability of their overwhelming market presence.
Similar consumer concerns and scrutiny regarding top U.S. banks after the subprime mortgage crisis and the Great Recession resulted in increased regulation and reporting.
