Tech stalwarts came into the week expecting the big news to come from quarterly earnings reports.
But that didn’t factor in a major bug hitting FaceTime or Facebook’s latest faux pas reigniting its feud with Apple, its Silicon Valley neighbor.
It was hard to keep up, so let’s review six lessons we learned this week, from Apple to Facebook to Elon Musk.
1. Apple Isn’t Infallible
Apple has spent much of the last year publicly championing itself as the tech giant that truly cares about protecting its customers. This came as Facebook and Google, to a lesser extent, battled multiple data privacy scandals over the course of 2018. At one point last spring, Apple chief Tim Cook couldn’t help himself from needling Facebook over its Cambridge Analytica scandal, saying he “wouldn’t be in this situation” if he were Facebook CEO Mark Zuckerberg.
Also Read: iPhone Q1 Sales Drop 15 Percent, Apple’s Stock Still Jumps 5 Percent on Record Services Revenue
And yet, Apple had it’s own privacy headache this week. A major FaceTime bug allowed iPhone users to listen to the audio on someone else’s phone — even if the recipient didn’t answer their phone. The glitch occurred when FaceTime users swiped up on their screen as they were dialing and added their own number to the call.
The makeshift three-way call allowed the caller to listen to the other person’s iPhone and, compounding matters, if the recipient hit the volume or power button to ignore the call, it instead started broadcasting video of their phone to the person calling them.
The issue impacted anyone that had updated their iPhone since October and forced Apple to disable Group FaceTime until a new iOS update is available next week. The bug put the privacy spotlight on Apple, if only for a moment, before Facebook had yet another misstep on Wednesday.
Also Read: Apple Sets First-Look Deal With Imagine’s Documentary Arm
2. Apple’s Growing Feud With Facebook… and Google
The social network’s latest controversy — running a clandestine “Research app” that paid some users as young as 13 a $20 monthly fee to let the company collect a wide range of data, including web search history and social media messages — only exacerbated Facebook’s strained relationship with Apple.
The app clearly violated App Store rules, and Apple hit back by revoking Facebook’s enterprise certificates — a move that blocked Facebook from running several internal iOS apps. That ended up causing companywide “chaos,” according to Business Insider, on the same day Facebook was set to report Q4 earnings.
Apple didn’t stop at Facebook, either. It also blocked Google’s internal iOS apps from working on Thursday as well for a separate rules violations. Apple eventually restored enterprise access for both of its Silicon Valley neighbors later on Thursday, but the message was clear: Apple has the muscle to paralyze its tech frenemies.
Speaking of Facebook, though…
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3. Users Don’t Care About Facebook’s Data Privacy Concerns
Facebook’s series of privacy scandals in the last year seemed to have had no real impact on its bottom line. The company reported this week it gained 30 million daily active users — including several million in the U.S. and Europe, its most lucrative markets. The gains pushed Facebook past 1.5 billion DAUs; altogether it has 2.32 billion monthly users. This was a big win for Facebook, after posting stagnate user growth in North America, and even losing millions of users in Europe, for most of 2018.
Facebook also brought in nearly $17 billion in Q4 revenue, easily lapping the company’s previous quarterly high by more than $3 billion. Anyway you slice it, it looks like Facebook’s data concerns were ultimately met with indifference from the majority of its users. When asked on its Q4 earnings call if bad press had impacted growth at all, Facebook CFO David Wehner quickly replied, “I’d probably just let the numbers speak for themselves.”
By tech earnings call standards, it was the equivalent of Yasiel Puig celebrating a massive home run.
Facebook shares have jumped more than 10 percent since Wednesday, and at about $166 per share, the company is close to where it was last March, when it admitted 87 million users were impacted by the Cambridge Analytica data leak.
Also Read: Instagram Stories Just Passed 500 Million Daily Users
4. Instagram Is Trouncing Snapchat at Its Own Game
On the same call, Zuckerberg couldn’t help but share the good news about Instagram Stories, the popular app’s feature allowing users to thread together pictures and videos with a 24-hour shelf life. Instagram Stories now has 500 million daily users — a revelation that came just days before Snap Inc., Snapchat’s parent company, is set to report its own earnings and give an update on user growth.
Since Snapchat lost 2 million users in the third quarter of 2018, falling to 186 million DAUs, it’s highly unlikely it’ll come anywhere close to matching its chief rival.
And if that isn’t enough to give Snap CEO Evan Spiegel an ulcer, Instagram has done it by blatantly copying Stories, one of Snapchat’s trademark features. Stay tuned on Monday to see if Snap is able to shake out of its own funk.
Also Read: AT&T Posts Record DirecTV Now Losses, Misses Q4 Revenue Estimates Despite WarnerMedia’s Strength
5. DirecTV’s Streaming Problem Is Only Getting Worse
DirecTV Now, DirecTV’s live streaming service that starts at $40 a month, was supposed to be the satellite company’s best defense against pesky, cord-cutting millennials and Gen Z’ers. Instead, it’s in just as much trouble as DirecTV’s legacy satellite TV business.
DirecTV Now lost 267,000 subscribers during the fourth quarter, shedding 14 percent of its total customers in the process, AT&T revealed earlier this week.
The companies core business didn’t fare any better, losing another 403,000 customers after losing more than 350,000 during Q3. “AT&T had guided to subscriber losses in Q4,” MoffettNathanson analyst Craig Moffett wrote to clients afterwards. “But nobody expected this.”
Also Read: Tesla Cuts 3,000 Jobs, Elon Musk Says ‘Our Products Are Still Too Expensive for Most People’
6. The New, Subdued Elon Musk
Silicon Valley’s favorite son/enfant terrible typically makes Tesla earnings calls must-listen events. He routinely shoots from the hip and isn’t afraid to blast an analyst for asking a “boring bonehead” question, as he did last May.
But this week, a more genteel Musk joined Tesla’s Q4 call. The biggest takeaway? Musk called the Model X, Tesla’s middle child SUV, the “Faberge egg of cars.” Not as exciting as butting heads with prodding Wall Street analysts.
Musk’s reserved approach could simply be a byproduct of him getting into hot water with the SEC last year. (It could also be the result of him being sued for calling a Thai rescue diver a pedophile.)
7. A Tech-wide “Pivot to Boring”
Whatever the reason, Musk seemed to represent an overall “pivot to boring” when it came to this round of earnings reports from the tech sector. Or maybe it’s just a pivot to less transparency.
Apple for the first time stopped sharing how many iPhones it sold, while Zuckerberg said Facebook would soon stop reporting Facebook’s overall user growth, opting instead to only share the growth of its “family of apps.”
And Amazon posted a record $72 billion in quarterly revenue, yet failed to reveal much of anything that went into its success beyond healthy holiday sales. The e-commerce giant continued to keep pesky details like its overall Prime membership under wraps.
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