Big Tech can’t stop worrying about Apple and TikTok

every three months, Wall Street watches expect high results from Big Tech companies. In less than a week, Snap, Alphabet, Microsoft, Meta, Spotify, Amazon and Apple will all announce to investors how well they’ve done.

Over the years, it has been a myth of untapped success with revenues, profits and user numbers generally trending in the same direction. This time though, big tech companies are revising their forecasts for rapid growth or decline in what they expect to be a challenging economic downturn as they report second-quarter results in recent days. And two names kept popping up in every earnings call: Apple and TikTok.

The two companies’ increasingly important role in the technology world has become bigger than the other results. TikTok’s user base has grown to one billion users in five years, far surpassing previous apps, including Meta-owned Facebook and Instagram, which both took eight years to reach the same goal. The threat of changes from Apple could affect access to other customers and Metaverse’s competition.

The first team was Snap, which reported its results on July 21. While the company’s 347 million daily active users beat analysts’ forecasts of 343 million, Snap’s revenue was modest. “Our financial results for Q2 did not reflect our expectations,” said CEO Evan Spiegel.

Dan Ives, chief analyst at Los Angeles investment firm Wedbush Securities, says the result was a “train wreck.” Snap’s results reflected “slowing digital advertising, Apple’s iOS privacy headwinds and even more heated competition from TikTok,” Ives said. Snap’s chief financial officer, Derek Anderson, admitted as much on the analyst call on the earnings side. “The competition continues to be fiercer than Tik Tok or the bigger, more sophisticated players in this space,” he explained.

A day later, on July 22, Twitter results focused on Elon Musk’s $33 million repurchase of the company. The company announced the year-over-year revenue decline, saying it reflected “ad industry headwinds.” Twitter didn’t take a call from analysts, and didn’t mention Apple by name, but the “headwind” could be code for the change in data sharing.

On July 26, Alphabet, the parent company of Google and YouTube, announced its results. The company’s CEO, Sundar Pichai, said on the earnings call that YouTube Shorts, its version of TikTok-like short videos, was watched by more than 1.5 billion users every month. A day later, Meta, the parent company of Facebook and Instagram, also announced their results.

“TikTok’s greatest innovation was realizing that social media doesn’t have to be just social media,” says digital strategist Jay Owens. And that recognition is one that other companies — key among them Meta, along with Instagram — are trying to follow. “Meta no doubt has data showing that friends and family aren’t the primary sources of engagement on Instagram and Facebook — but they haven’t dared to make Instagram the home page,” she says. “Now they’re playing hand-held — and users seem to have not one, but three apps captured by vertical video.”

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