Posted by Hyderabad: Top 20 APAC tech companies reported an average revenue of over $40 billion with an average 4% revenue growth in 2019. Software sales and advertising revenue were instrumental for these top 20 APAC tech companies in driving their revenues in 2019.
However, for them going may get tough in 2020 due to the ongoing volatile geopolitical situation and COVID-19, according to GlobalData.
Of the top 20 APAC tech companies, 80% reported YoY growth in their revenues with eight reporting double-digit growth in 2019. One of the world’s leading video game platform providers, Nintendo clocked the highest YoY revenue growth amongst the top 20 tech companies in the region.
“Higher software sales for Nintendo Switch platform contributed to the increase in its hardware sales. The Nintendo Switch platform reported 36.4% YoY growth as it launched special hardware edition, online payment service and several new titles of compatible software related to this platform,” said Keshav Kumar Jha, Business Fundamentals Analyst – GlobalData.
“Meanwhile, 19% increase in the game and network services, mainly driven by higher game software sales, not only helped Sony to register YoY revenue growth, but also offset revenue loss due to the substantial decrease in smartphone and television unit sales,” added Jha.
Tencent reported more than 15% YoY revenue growth in 2019 due to increase in online games and online advertisement revenue, which grew 10% and 18%, respectively.
Growing demand for smartphone games in China, including Honour of Kings and Peacekeeper Elite, and overseas titles such as PUBG Mobile and Supercell titles helped improve its online games sales.
“Increase in advertising revenues from Weixin (the Chinese version of WeChat) led to rise in the company’s online advertising revenue. Tencent’s VAS business, and FinTech and cloud services also contributed significantly to its revenue growth,” added Jha.
Baidu reported 4.7% loss from its online marketing, but a 32% gain from its online entertainment service business iQIYI. That helped Baidu to post a marginal revenue growth in 2019.
India-based IT services providers, Tata Consultancy Services (TCS), Infosys, HCL Technologies, Wipro and Tech Mahindra reported 5%-15% YoY revenue growth, mainly attributable to broad based revenue growth experienced across verticals and geographies.
Samsung and SK Hynix reported over 10% decline in revenue. Samsung’s semiconductor sales declined 25% on YoY basis, whereas over 30% decline in DRAM and NAND flash products in overseas markets resulted in net sales decline for SK Hynix.
“Improved top-line performance highlights the robust business model of major tech companies in the APAC region, which not only helped them mitigate the risk posed by COVID-19 but also win over investors’ confidence,” pointed out Jha.
“However, with majority of the governments implementing lockdown restrictions and closing borders in an attempt to contain the pandemic, they are resulting in the supply chain disruptions and muted market demand,” he stated.
“Against this backdrop, most of the companies are cutting down on their technology spending. In addition, the prevailing US-China geopolitical tensions may also affect the operations of APAC-based technologies companies in 2020,” concluded Jha.
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