Several major tech titans reported their quarterly earnings, including Apple, Facebook, and Twitter. These three in particular had interesting stories told—about their current state and about their future.
Apple generated $42.4 billion last fiscal quarter, earning a profit of just under $8 billion. Overall, the company slightly topped analyst expectations for revenue and iPhone sales. Apple sold more than 40 million phones, 10 million iPads, and over four million Macs during the quarter. The company generated $24 billion from the iPhone, $5 billion from the iPad, $5 billion from Macs, and $6 billion from services. Shares rose 6%.
What’s next: Where will the world’s most valuable technology company turn to experience new growth? One area we know Apple is investing in is autonomous vehicles, AKA the self-driving car. The company is silent on this project, which may not launch until 2021, but several sources over the last couple of years have confirmed Apple is brewing something big in that department.
Also, augmented reality and artificial intelligence. Augmented reality, perhaps best demonstrated by the global success of Pokémon Go, is something Apple believes in long-term, CEO Tim Cook says. He also confirmed Apple is very interested in artificial intelligence—technology the company is already starting to use to curate content for users and identify usage patterns to improve battery life (not to mention Siri, its digital assistant).
Gaining only three million new active users over three months, Twitter seems unable to turn a profit—the company lost more than $100 million last quarter. Shares plunged 10%.
What’s next: The company is investing heavily into livestreaming sports, but investors remain unconvinced. Some analysts now consider Twitter in a similar position to Yahoo a year or two ago—so don’t be surprised to see CEO Jack Dorsey quietly seek a potential suitor.
The social media platform earnings beat expectations on both earnings and revenue, with earnings of 97 cents per share and revenue of $6.44 billion. Analysts predicted earnings of 81 cents per share and $6 billion in revenue. Facebook also added 60 million new users, bringing its total to 1.71 billion users, compared to analyst predictions of 1.69 billion. Its stock was up 6.5% in after hours trading.
Facebook’s overall ad revenue rose 63% from a year ago, to $6.24 billion. Mobile advertising rose to account for 84% of all ad revenue in the quarter, up from 76% in Q2 2015.
What’s next: While Facebook continues to surprise investors with growth in mobile advertising, it’s not sustainable. And CEO Mark Zuckerberg has been silent on the company’s income diversification plans.
But Facebook has several options: in-house products like live video and Messenger, as well as acquired assets like WhatsApp and Oculus. Not all of these may turn out to be major revenue generators, but having them in the roster means Facebook has choices when it needs to maintain future growth.
There’s also projects like Aquila, a solar-powered aircraft that will beam internet to places that have never been connected, and DeepText, a deep learning-based engine that can understand the context of several thousand posts per second across 20 languages.