The earnings season was dominated by two businesses that are both existential threats to their rivals: Apple and TikTok.
Wall Street eagerly awaits the big tech companies’ quarterly reports every three months. In a little more than a week, Snap, Alphabet, Microsoft, Meta, Spotify, Amazon, and Apple all report their financial results to investors. It has been a story of unbridled success for years, with growth in revenues, profits, and user counts overall. However, this time, prominent IT companies have spoken of stalled growth or declines and revised their future expectations in response to what they anticipate to be a difficult economic downturn as they recently published their second-quarter results. And two names kept coming up in every earnings call: TikTok and Apple.
Due to the growing roles and revenues of the two companies in the tech industry, their results loomed large over those of the others. In comparison to other apps, notably Facebook and Instagram, both of which were owned by Meta, it took TikTok only five years to achieve a billion users. Apple is threatening to make adjustments that could affect the client base and metaverse rivalry of the competition. Snap was the first member of the cohort and released its findings on July 21. Although Snap’s 347 million daily active users exceeded analyst expectations of 343 million, its income lagged. CEO Evan Spiegel then stated that their financial results for Q2 do not reflect their vision. The outcomes, according to Dan Ives, principal analyst at Los Angeles investment company Wedbush Securities, were a “trainwreck.” According to Ives, Snap’s numbers show “a digital ad slowdown, Apple iOS privacy challenges, and TikTok rivalry progressively heating up.” In the analyst’s call with the earnings, Derek Anderson, the chief financial officer of Snap, made this admission. He said, whether it’s with TikTok or any of the other really significant, smart companies in this market, competition has only increased. The following day, on July 22, Twitter’s financial results centered on the $33 million spent on tasks associated with Elon Musk’s on-again, off-again acquisition of the business. The company reported a drop in sales year over year that it attributed to “headwinds in the advertising market.” Although Twitter didn’t host an analyst call and avoided mentioning Apple by name, the “headwinds” were probably coded for the company’s modifications to the data-sharing policy. Google and YouTube’s parent company, Alphabet, released its findings on July 26. More than 1.5 billion users a month watch YouTube Shorts, the firm’s version of TikTok-like short-form videos, according to CEO Sundar Pichai of the company during its earnings call. The data were also made public a day later by Meta, the parent company of Facebook and Instagram. According to digital consultant Jay Owens, “TikTok’s major breakthrough was discovering that social media no longer needed to be social, just media.” And other businesses are attempting to emulate that recognition, with Meta leading the way with Instagram. Meta undoubtedly had data demonstrating that friends and family were no longer the primary drivers of engagement on Facebook and Instagram, but the company didn’t quite have the courage to make Instagram’s Explore tab the home page, according to the author. They are currently playing catch-up, and users appear to be about to have three apps that are dominated by vertical video. All of the apps are in a race to mimic each other, but they also have other significant problems. The outcomes from Snap, Twitter, and Meta all emphasized one of the fundamental problems with user tracking and internet advertising: the modifications made to iOS 14.5 that allowed users to choose not to be monitored by large apps End consumers are empowered by Apple’s adoption of app-tracking transparency (ATT), but apps lose access to user data that they had become accustomed to using for financial gain. Users can choose to accept or disallow apps from tracking them and providing their data to advertising. Mark Zuckerberg, CEO of Meta, criticized Apple for reasons other than how it altered how apps could track users. According to Zuckerberg’s internal comments, which were obtained by The Verge, the firm is engaged in a “really profound, philosophical competition” over the future of the metaverse. While Meta has been instrumental in the establishment of a cross-industry Metaverse Open Standards Group, Zuckerberg believes Apple has stayed out of the process because it wants to create a closed-off system for the metaverse that is tied to its headsets, much like the environment it has created for its iPhones.
According to Apple’s own July 28 statistics, the business, unlike some of its rivals, could surpass analyst expectations for its total revenues while still staying afloat. Tim Cook, Apple’s CEO, stated that the company’s record quarterly earnings “speak to Apple’s relentless efforts to innovate, to create new possibilities, and to enrich the lives of our customers.”