There's a micro focus on us, how much
money is being put into investment, and then how much money is coming out.
In the story, what did you make of it, Helena?
Well, I think the hot topic for the last few weeks has been the huge CapEx spend,
whether it's justifiable. I mean, Amazon has guided exceptional
increase in CapEx since the last quarter in the first half of 2024.
Their cap was 30.5 billion. They're guiding even higher month for
the second half of the year. Just to put in comparison, their CapEx
for the entire year last year was only 40.8 billion.
So that is definitely a very significant increase.
So like all the other big tech companies, they're selling their story
of strong AI growth, very comforting. They will like to have more capacity
than they already have today, and they're claiming that they're seeing
strong signals of high future demand.

I guess also, if you're in the air, it's almost impossible for you to stop investing because in a short period you would be obsolete with no means to catch up. But to investors, it really requires a lot of patience. Everyone is telling the same story of your last day, so it's hard to see whether in the short term was investment would pay off in the long run. Helena just focused on WAC. We've hardly discussed the retail business or even advertising. Did you see anything in those segments of the business that interested you? For us, it has been accelerating nicely and 19% year on year. So what we especially like about IWC is there are a high operating margin compared to retailers because our operating margin is 36% compared to retailers, which is only single digit. So items right now only contribute to 18% of the total revenue. So we do believe was ADA worth skilling up.

So for us, it is going to take up a bigger portion of the entire revenue. So we think the real kicker for Amazon in the future would be the margin expansion brought by this. Let's talk about Apple. I look at the numbers. It was basically a beat across the board, apart from China. How much emphasis do you put on that China number? Well, I was the Apple is saying they still see it already as an improvement compared to the first half of the year. By the numbers, definitely not great. Usually when their particular work is not doing well, Apple specifically point out, is not really the iPhone, but actually the other product category that dragged the sales was. They have not commented in like that for this particular time, so we can take it that Apple is actually iPhone is actually part of the reason why, in fact, one major reason for the decline. So domestic competition from local brand is still playing a big part. Apple was giving out huge discount in

order to fight the competition, they
were. That will also be a factor that hurts the
revenue. Tim Cook and Luca Maestri got a lot of
questions about how Apple intelligence will impact an upgrade cycle.
In October, probably when the sixth
generation comes. Have you done the math on that?
Yes, I did. So I will still remain pretty
muted. They're down 1% year on year for this
quarter. So if we actually do the math there,
guiding for a 5% growth rate in the next quarter.
So factoring service sector, which is continually growing double digits and
iPad, which grew pretty well, also double digits in this quarter.
So we're probably not going to give so much in the next quarter in terms of
iPhone. It's probably going to remain flat or actually perform more poorly.
So we're thinking that Apple intelligence boost for the last cycle
that everyone's been waiting for is probably unlikely to be seen in 2024.
It's more of a 2025 story.

Amazon’s Shares Slide as AI Spending Spooks Investors

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Amazon’s Shares Slide as AI Spending Spooks Investors

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