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Last Updated : Apr 24, 2019 01:24 PM IST | Source:

Apple is reliant on Amazon. Here's why

Apple paid over $30 million per month to Amazon's cloud service to run its cloud-based apps.

Moneycontrol News @moneycontrolcom

Tech giant Apple and Amazon may be rivals but the Cupertino-based company is dependent on Amazon to offer its services to users. The iPhone maker pays as much as $30 million every month to Amazon's cloud services comapny, Amazon Web Services (AWS), as per a CNBC report.

The company's computing and storage needs are very high as over a billion Apple devices like iPhones, Macbooks and iPads are used by people every month.

Recently, Apple decided to stop releasing information about the number of iPhone units and other hardware products sold. Instead, it now discloses information about profit margins from its cloud-based software products. This unearthed information that at the end of March 2019, the average spending by Apple on its software products was $30 million per month in the first quarter of 2019.

The company also has ramped up expenditure on its storage requirements. In January 2018, Apple had said it planned to invest $10 billion in the next five years on establishing data centres in the US. Out of this, the company said, $4-5 billion would be used in 2018 itself.

But as of now, the company's expenditure on AWS is set to grow well beyond last year's $350 million if it continues to spend over $30 million monthly. This amount would then be higher than what cab hailing company Lyft, social media app Pinterest and photo-sharing app Snapchat spend on AWS.

It is important to note that Apple will soon be Amazon's rival as the former is about to launch its own video content streaming platform. Apple announced this service along with a credit card and its news services, in an attempt to shift from hardware products to services.

Many other tech companies are reliant on AWS. Lyft will have paid AWS close to $300 million by 2021 according to its contract. Pinterest will have spent nearly $750 million to Amazon for the cloud services at the end of its six-year contract in 2023. Companies like Google, Facebook and Microsoft, who do not have enough resources to run their own data centres also have substantial contracts with AWS.

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First Published on Apr 24, 2019 01:16 pm
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