Apple and Facebook on Wednesday delivered stunning gains in profits and revenues over the past quarter, in the latest sign that Big Tech is delivering for 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 Mark Zuckerberg said in a call to investors 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 profit in the holiday period rose 29 percent from a year ago to $28.7 billion, while revenues grew 21 percent to $111.4 billion, with international sales accounting for nearly two-thirds of sales.
Wedbush analyst Dan Ives described Apple quarterly earnings as "a jaw dropper" and said 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 topped the $100 billion mark 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," chief executive Tim Cook said.
The news was similar at Facebook, which saw its global user base increase in a world roiled by the coronavirus outbreak.
Facebook reported profit of $11.2 billion on revenue of $28 billion, increases of 53 percent and 33 percent when compared with the same period the prior year.
"We had a strong end to the year as people and businesses continued to use our services during these challenging times," Zuckerberg said.
- Reaching 3.3 billion -
Facebook said its core social network had some 2.8 billion users at the end of December while 3.3 billion people used at least one of its "family" of apps including Instagram, WhatsApp and Messenger.
The Silicon Valley colossus noted in the release 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, and 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 in the release.
- Clash on privacy -
Facebook 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 making it tougher to target ads.
"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 the iPhone maker's new measures on data collection and targeted ads would hurt small businesses.
The dispute between the tech giants centers on changes in the latest version of Apple's iOS operating software, which include a tracking transparency feature that Facebook claims will cripple its ability to serve up targeted ads.