Apple Inc and Facebook Inc on Wednesday delivered stunning gains in profits and revenues last quarter, in the latest sign that big technology companies are delivering for COVID-19 pandemic-hit consumers around the world.
Blowout quarterly updates from the two Silicon Valley giants highlighted how consumers relied on social media, digital services and gadgetry, as they hunkered down for the global health crisis.
Facebook chief executive officer Mark Zuckerberg told investors that Apple was becoming one of his company’s biggest competitors, with its rival smartphone messaging service and tight grip on the App Store, the sole gateway onto iPhones.
“Apple has every incentive to use their dominant platform position to interfere with how our apps and other apps work, which they regularly do to preference their own,” Zuckerberg said. “Apple may say that they’re doing this to help people, but the moves clearly track their competitive interests.”
Apple said that profit in last month’s Christmas holiday period rose 29 percent from a year earlier to US$28.7 billion, while revenue grew 21 percent to US$111.4 billion, with international sales accounting for nearly two-thirds of sales.
Wedbush Securities Inc analyst Dan Ives described Apple’s quarterly earnings as “a jaw dropper,” adding that strong iPhone sales in China boded well for the company’s fortunes.
The more iPhones there are in people’s hands, the more opportunity Apple has to sell them music, games, television and more in what has been a priority for the company.
Sales climbed beyond US$100 billion for the first time as Apple won over pandemic-hit consumers with new gadgets and services, reporting solid gains in sales of iPhones, wearables and digital content.
“We’re gratified by the enthusiastic customer response to the unmatched line of cutting-edge products that we delivered across a historic holiday season,” Apple chief executive officer Tim Cook said.
The news was similar at Facebook, which saw its global user base increase in a world roiled by the pandemic.
Facebook reported profit of US$11.2 billion on revenue of US$28 billion, increases of 53 percent and 33 percent respectively compared with the same period in 2019.
“We had a strong end to the year as people and businesses continued to use our services during these challenging times,” Zuckerberg said.
Facebook said that its core social network at the end of last month had about 2.8 billion users, and 3.3 billion people used at least one of its “family” of apps, including Instagram, WhatsApp and Messenger.
The Silicon Valley colossus said that it faces “significant uncertainty” in the coming year, citing new regulations that could limit how it delivers targeted advertising.
Facebook takes in the bulk of its revenue from advertising,
The company said that it benefited as the pandemic accelerated a shift to online commerce, particularly for products as opposed to services such as booking travel.
“Looking forward, a moderation or reversal in one or both of these trends could serve as a headwind to our advertising revenue growth,” Facebook said.
The company also warned that it expects to face strong “headwinds” from an evolving regulatory landscape and from moves such as an Apple change to its mobile operating system (iOS), which would make it tougher to target advertising.
“While the timing of the iOS 14 changes remains uncertain, we would expect to see an impact beginning late in the first quarter,” Facebook said.
The social networking giant last month opened fire on Apple, saying that the iPhone maker’s new measures on data collection and targeted advertising would hurt small businesses.
The dispute between the tech giants centers on changes in the latest version of Apple’s operating system, which include a tracking transparency feature that Facebook claims would cripple its ability to serve up targeted advertising.
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