Tag: Mobile

Nvidia’s A.I.-driven stock surge pushed earnings multiple three times higher than Tesla’s

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Nvidia CEO Jensen Huang,speaks at the Supermicro keynote presentation during the Computex conference in Taipei on June 1, 2023.

Walid Berrazeg | Sopa Images | Lightrocket | Getty Images

Following last year’s market route in tech stocks, all of the industry’s big names have rebounded in 2023. But one company has far outshined them all: Nvidia.

Driven by an over decade-long head start in the kind of artificial intelligence chips and software now coveted across Silicon Valley, Nvidia shares are up 180% this year, beating every other member of the S&P 500. The next biggest gainer in the index is Facebook parent Meta, which is up 151% at Friday’s close.

Nvidia is now valued at over $1 trillion, making it the fifth-most valuable U.S. company, behind only tech behemoths Amazon, Apple, Microsoft, and Alphabet.

While Nvidia doesn’t carry the household name of its mega-cap tech peers, its core technology is the backbone of the hottest new product that’s quickly threatening to disrupt everything from education and media to finance and customer service. That would be ChatGPT.

OpenAI’s viral chatbot, funded heavily by Microsoft, along with AI models from a handful of well-financed startups, all rely on Nvidia’s graphics processing units (GPUs) to run. They’re widely viewed as the best chips for training AI models, and Nvidia’s financial forecasts suggest insatiable demand.

The company’s powerful H100 chips cost around $40,000. They’re being swept up by Microsoft and OpenAI by the thousands.

“Long story short, they have the best of the best GPUs,” said Piper Sandler analyst Harsh Kumar, who recommends buying the stock. “And they have them today.”

Even with all that momentum and seemingly insatiable demand, baked into Nvidia’s stock price is a slew of assumptions about growth, including the doubling of sales in coming quarters and the almost quadrupling of net income this fiscal year.

Some investors have described the stock as priced for perfection. Looking at the last 12 months of company earnings, Nvidia has a price-to-earnings ratio of 220, which is stunningly rich even compared with notoriously high-valued tech companies. Amazon’s P/E ratio is at 110, and Tesla’s is at 70, according to FactSet.

Should Nvidia meet analysts’ projections, the current price still looks high compared to most of the tech industry, but certainly more reasonable. Its P/E ratio for the next 12 months of earnings is 42, versus 51 for Amazon and 58 for Tesla, FactSet data shows.

When Nvidia reports earnings later this month, analysts expect quarterly revenue of $11.08 billion, according to Refinitiv, which would mark a 65% increase from a year earlier. That’s slightly higher than Nvidia’s official guidance of about $11 billion.

Investors are betting that, beyond this quarter and the next, Nvidia will not only be able to ride the AI wave for quite some time, but that it will also power through growing competition from Google and AMD, and avoid any major supply issues.

There’s also the risks that come with any stock flying too high too fast. Nvidia shares fell 8.6% this week, compared to a 1.9% slide in the Nasdaq, with no bad news to cause such a drop. It’s the steepest weekly decline for Nvidia’s stock since September of last year.

“As investors, we have to start wondering if the excitement around all the great things that Nvidia has done and may continue to do is baked into this performance already,” WisdomTree analyst Christopher Gannatti wrote in a post on Thursday. “High investor expectations is one of the toughest hurdles for companies to overcome.”

How Nvidia got here

Nvidia’s stock rally this year is impressive, but the real eye-popping chart is the one showing the 10-year run. A decade ago, Nvidia was worth roughly $8.4 billion, a tiny fraction of chip giant Intel’s market cap.

Since then, while Intel’s stock is up 55%, Nvidia’s value has ballooned by over 11,170%, making it seven times more valuable than its rival. Tesla, whose stock surge over that time has made CEO Elon Musk the world’s richest person, is up 2,279%.

Nvidia founder and CEO Jensen Huang has seen his net worth swell to $38 billion, placing him 33rd on the Bloomberg Billionaires index.

An Nvidia spokesperson declined to comment for this story.

Before the rise of AI, Nvidia was known for producing key technology for video games. The company, reportedly born at a Denny’s in San Jose, California, in 1993, built processors that helped gamers render sophisticated graphics in computer games. Its iconic product was a graphics card — chips and boards that were plugged into consumer PC motherboards or laptops.

Video games are still a big business for the company. Nvidia reported over $9 billion in gaming sales in fiscal 2023. But that was down 27% on an annual basis, partially because Nvidia sold so many graphics cards early in the pandemic, when people were upgrading their systems at home. Nvidia’s core gaming business continues to shrink.

What excites Wall Street has nothing to do with games. Rather, it’s the emerging AI business, under Nvidia’s data center line item. That unit saw sales rise 41% last year to $15 billion, surpassing gaming. Analysts polled by FactSet expect it to more than double to $31.27 billion in fiscal 2024. Nvidia controls 80% or more of the AI chip market, according to analysts.

Nvidia’s pivot to AI chips is actually 15 years in the making.

In 2007, the company released a little-noticed software package and programming language called CUDA, which lets programmers take advantage of all of a GPU chip’s hardware features.

Developers quickly discovered the software was effective at training and running AI models, and CUDA is now an integral part of the training process.

When AI companies and programmers use CUDA and Nvidia’s GPUs to build their models, analysts say, they’re less likely to switch to competitors, such as AMD’s chips or Google’s Tensor Processing Units (TPUs).

“Nvidia has a double moat right now in that they they have the highest performance training hardware,” said Patrick Moorhead, semiconductor analyst at Moor Insights. “Then on the input side of the software, in AI, there are libraries and CUDA.”

Locking in revenue and supply

As Nvidia’s valuation has grown, the company has taken steps to secure its lead and live up to those lofty expectations. Huang had dinner in June with Morris Chang, chairman of Taiwan Semiconductor Manufacturing Co.

TSMC, the world’s leading manufacturer of chips for semiconductor companies, makes Nvidia’s key products. After the meal, Huang said he felt “perfectly safe” relying on the foundry, suggesting that Nvidia had secured the supply it needed.

Nvidia has also turned into a heavyweight startup investor in the venture world, with a clear focus on fueling companies that work with AI models.

Nvidia has invested in at least 12 startups so far in 2023, according to Pitchbook data, including some of the most high-profile AI companies. They include Runway, which makes an AI-powered video editor, Inflection AI, started by a former DeepMind founder, and CoreWeave, a cloud provider that sells access to Nvidia GPUs.

The investments could give the company a pipeline of growing customers, who could not only boost Nvidia’s sales down the line but also provide a more diverse set of clients for its GPUs.

Some of the startups are putting numbers out that show the sky-high levels of demand for Nvidia’s technology. Kumar from Piper cited comments from CoreWeave management, indicating that the company had $30 million in revenue last year, but has $2 billion in business contracted for next year.

“This is the representation of demand for generative AI type applications, or for voice-search applications, or generally speaking, GPU applications,” Kumar said.

Nvidia is now coming close to the midpoint of its current GPU architecture cycle. The latest high-end AI chip, the H100, is based on Nvidia’s Hopper architecture. Hopper was announced in March 2022, and Nvidia said to expect its successor in 2024.

Cloud providers including Google, Microsoft and Amazon have said they’re going to spend heavily to expand their data centers, which will mostly rely on Nvidia GPUs.

For now, Nvidia is selling nearly every H100 it can make, and industry participants often grumble about how hard it is to secure GPU access following the launch of ChatGPT late last year.

“ChatGPT was the iPhone moment of AI,” Huang said at the company’s annual shareholder meeting in June. “It all came together in a simple user interface that anyone could understand. But we’ve only gotten our first glimpse of its full potential. Generative AI has started a new computing era and will rival the transformative impact of the Internet.”

Investors are buying the story. But as this week’s volatile trading showed, they’re also quick to hit the sell button if the company or market hits a snag.

— CNBC’s Jonathan Vanian contributed reporting.

WATCH: CoreWeave raises $2.3 billion in debt collateralized by Nvidia chips

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August 12, 2023
Podcast: Future of mobile payments | Bank Automation News

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Financial institutions look to omnichannel offerings to meet clients where they want to be met, and most consumers now prefer a mobile experience — even to pay their bills.

“Eighty-seven percent of Americans prefer to be met over their mobile device than any other channel,” payments provider Solutions by Text Chief Executive Dave Baxter tells Bank Automation News on this episode of “The Buzz” podcast.

Mobile technology allows customers to be reached by billers on demand and in real time.

For billers, reaching clients about payment is effective via text messaging since 97% of text messages are opened and read in less than five minutes, Baxter notes. Meanwhile, emails can end up unread or languishing in spam folders.

Bills sent through text are likely to reach a consumer at the right time. Baxter’s Solutions by Text has a 99% deliverability rate where its messages reach consumers, Baxter said.

Listen as Baxter discusses how to integrate text messaging with payments.

The following is a transcript generated by AI technology that has been lightly edited but still contains errors.

Whitney McDonald 0:04
Hello and welcome to The Buzz a bank automation news podcast. Today is August 8 2023. My name is Whitney McDonald and I’m the editor of bank automation news. Joining me today is Dave Baxter, Chief Executive of solutions by text. He is here to discuss the idea of turning messaging into payments.Dave Baxter 0:24
My name is David Baxter. I’m the president and CEO of solutions by text. We’re a messaging company that was founded in 2008. Based in Dallas, Texas, with remote offices throughout North America, as well as Bangalore, India, we were one of the first messaging companies that really pioneered text messaging. And we lead a most compliant messaging platform in the industries that we service, specifically, consumer finance in some verticals of consumer buy, we service roughly 1500 customers throughout auto mortgage community banks, credit unions, card issuers, and marketplace lending.

Whitney McDonald 1:08
Great. Well, thanks for joining us on the podcast. I would love to start off by setting the scene here on how you have determined how clients want to be communicated with what works, what doesn’t work. Tell us about your strategy.

Dave Baxter 1:22
Yeah. So when we were thinking about the messaging platform really started with thinking through, we’re an extension of our customers brand, to the extent that we believe that the consumer is always going to win, and you have to meet consumers where they’re at from acquisition of an account all the way through delinquency and everything in between. And there’s no denying the fact that everybody is mobile first, right. And as far as messaging goes, in Gen Z, they’re on their phone greater than, you know, 10 hours per day, on average, people look at their phones, roughly 20 times a minute, there are billions of messages sent every single day. And so we felt that a logical play for us is really thinking through bill pay, and meeting consumers like just give them a very seamless, quick on demand way to view and subsequently pay a bill on the device that they carry with them throughout the day.

Whitney McDonald 2:29
Now, if you could talk us through this idea of turning messages into payments, you discussed that everyone’s on their phone all the time you gave those data points, I think that you said you look at your phone 20 times per minute, can you talk about really meeting the customer, where they are and how you turn this into a way of payments?

Dave Baxter 2:49
Yep, so 87% of Americans and this is through the the last at how Americans pay their bills, the latest one is coming out. So the there will be refreshed data, we can discuss that you know, at another time, but 87% of Americans prefer to be met over their mobile device than any other channel. So it’s don’t phone me don’t write me a letter, don’t send me an email. So it’s clearly the most preferred channel I mean, look at your your daily life, right? And everything that you do, you’re likely, you know, in an in and around your phone using different applications, you’d like to communicate with your friends and colleagues and family through their phones. So why not communicate with a biller through through text messaging? Interesting stats, and so far as 65% of payments are made on demand as a result of an alert, or reminder. So what not they better way to get an alert or reminder than through a text message or for that matter, you know, there’s a myriad of different sorts of messages, right, you’ve got rich communication you got you got Apple business chat, you have iMessage, you have SMS, you’d have text and WhatsApp and so on and so forth. So the technology is really lending itself to this place to meet consumers on demand in real time. And so no wonder that 97% of messages are opened and read in under five minutes. Whereas I look at my phone right now, I probably have 3000 unread emails, because most of my emails are probably either I don’t know who it is, so I delete it or it gets wound up in my spam folder. And I think that that’s part and parcel to why we have such high success deliverability rates so 99% of the messages that we attempt to send actually hit the consumer at the right time in a compliant way to keep our customers on the right path. We operate and really to two very difficult Markets, consumer fi highly regulated market, as well as telecommunications. And one of the reasons that we have very low opt out rates and very high deliverability rates is we maintain the integrity of the rules of the carriers and the carriers are trying to protect against spam. And that’s where email just failed. Only 21% of emails are actually ever written threads he’s been.

Whitney McDonald 5:28
Now if we could talk through how you actually achieve this.

Dave Baxter 5:32
Yep. So proprietary platform that, you know, we built, we just came out with our two Dotto platform that we call fintechs. Because we operate in the center of financial services, as well as tax, we coined the phrase, Fin fintechs. So how do our customers leverage the platform? There’s outbound messages, there’s inbound messages, inbound and outbound MMS. So imagine if, for example, when I said that acquisition piece, I could open up a credit card, through taps with a call center agent, we create some efficiencies for agents, right? How do we make a payment, there’s an alert or reminder. And that first payment, all we need to do is capture the funding information. And we do that in a very seamless way. So in real time, we’re extracting customer account information. So your account number, your address, the amount due the due date, and then we just capture that funding information, whether that’s your bank account information, or your card information, and then you subsequently, you know, make that make that bill pay for all other transactions. So now we’ve tokenized the funding information. We’ve stored and vaulted that funding information. So for the next transaction, it’s all driven by key keywords. Whitney, your American Express bill is due tomorrow. For $500, would you like to make a payment? Reply? Yes, and it’s just it’s really just as simple as that. So that’s how, you know we convert messages to payments, but there’s a lot more that goes into the messaging platform. We were working on text AI, where we can empower the end user of these see themselves in the status of delinquency, we can enable somebody to self cure their debt online, imagine if you know, I have a delinquent credit card, I might be able to negotiate with my bank or card issuer songs, any you know, human interaction, I can make a promise to pay, I can make a series of payments, maybe I could make a payment, make a payment right now just to, you know, satisfy satisfy the debt. We started in consumer fine, because it’s highly regulated. Obviously, that’s not to say that we couldn’t, you know, go after other verticals. But, you know, that’s kind of where we’re playing right now. And then of course, there’s leveraging our platform for marketing services, remarketing, cross sell and upsell opportunities. And what we have found is that the customer satisfaction goes up, call center times go down.

Whitney McDonald 8:22
Now I know you just gave a great an example of an added efficiency any other efficiencies that financial institutions might be able to benefit from?

Dave Baxter 8:31
Yeah, so I think, you know, going back to that whole delinquency piece, you know, we would, we believe that we could reduce charge offs by 10 to 15%, just by enabling somebody to self cure their debt. It’s not like people are, you know, think about tax, there’s a level of anonymity and a texting conversation. Whereas when you’re speaking to a bill collector, one, it’s next to impossible to capture somebody on a phone to the regulatory bodies that make it really difficult to establish right party contact, which you can do over tax. So why not meet the consumer in a way that’s non invasive, make it a little bit easier on them? So I think, you know, reducing charge offs, I think, you know, customer satisfaction goes up, I think this notion of real time. And, you know, capturing a payment right before it’s due, as I said, most payments are made on demand as a result of, you know, an alert or a reminder. And I think that, you know, you know, we obviously live in this world, it’s mobile first, but text messaging is the most widely used app on your phone.

Whitney McDonald 9:42
Now and a question about adoption for this because everyone has a phone in their pocket or is using these types of capabilities and getting text messages in adoption pretty easy to to get folks to opt in to this type of tool.

Dave Baxter 10:00
Yeah, it is. And, you know, we look at it in terms of like, adoption, but also opt out. And, you know, opt out, we opt out less than 1% of all of our transactions. And, you know, and think about, like I have, for the most part part gone paperless. So that’s another material benefit to a financial institution, think about the documents that I could send letters of consent of Bill, just not like isolated to the payment, there are many things that we could be doing to help these financial institutions, you know, reach their consumers and in ways that they hadn’t been able to and often in in real time, right. You know, think about just the, not that long ago, the the amount of clutter that you had with all of the bills that were coming into your house, and I think that there’s a much more a efficient way to be able to, you know, achieve the same outcome and do it where were the consumers at right.

Whitney McDonald 11:01
With that in mind, and Bill Pay in mind and reaching folks by text and allowing this this payment to, to happen. Where’s this all headed? What’s next in the future of payments? Or even in bill pay?

Dave Baxter 11:18
Yeah, you know, um, well, I think that we’re onto something. But, you know, the like, here’s the thing, bills are not going away. You know, there’s, I think there’s a double moat around our business. You know, there’s roughly 16 billion bills per annum 4 billion of which are related to consumer consumer finance vertical, but it’s 40% of the total spender about a trillion dollars is in and around consumer finance. And then I think a few things one, I think that the the notion of like, so we’re more of a push strategy, not a pull strategy, I think people have app fatigue. I know myself, I’m constantly forgetting my username and, and passwords for all the, you know, the different sites that I have to have a username or password password, there’s obviously two factor of that. So it’s like, it’s very complex, I think that what, you know, payments has got to be easy, fast, real time, also, and that it like, has to be great customer experience. And I think that’s where real time payments are, you know, we’re bill pay is going, you know, we live in this world of real time. Nobody has cracked the code in real time as it relates to, to build back, which is strange meat, because everywhere else in the world, real time payments is taken off. So I think you’re gonna see Bill Pay, coupled with real time. I do believe it’s mobile. First, I think it’s tax. And I think that the technology is empowering us to get there with us being able to render a bill over a text message. So there were like two other things that I think are really interesting that afford us to do. So we’re building a text wallet with network tokenization. So imagine if like, I contend that your mobile phone number is your new social security number. When was the last time you changed your mobile number and it’s very secure. Think about I know it’s Whitney, you biometric into your phone, your phone has a phone ID, you can geo located so I know it’s you, I know you made the billpay. And imagine if I could, you know you have wallets that are in your phone, imagine if a wallet was attached to your mobile number that you could use over a text message. So we’re working on that, that you can take to different billers. Hence that that network tokenization of the funding information so I can recognize Whitney, for all of your different bills without you having to continue to reenter your funding information. So I think that, you know, that is another area and no other channel can really do that in such a way that gives you ease of mind that, you know, it’s a secure transaction and the other beauty of gopay there’s very, very limited fraud, right? The likelihood that Whitney is going to pay David’s you know mortgage is zero, right? So that’s another benefit of you know, kind of proving this out and and built that

Whitney McDonald 14:34
you been listening to the buzz, a bank automation news podcast, please follow us on LinkedIn. And as a reminder, you can rate this podcast on your platform of choice. Thank you for your time and be sure to visit us at Bank automation news.com For more automation news,

Transcribed by https://otter.ai

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Whitney McDonald

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August 8, 2023
Facing lawsuit from Musk, nonprofit head says he won’t stop exposing Twitter’s problems

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An effigy of Elon Musk is seen on a mobile device with the Twitter logo in this photo illustration on 23 July, 2023 in Warsaw, Poland.

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Imran Ahmed refuses to be intimidated by Elon Musk. And he’s insisting that researchers at his nonprofit Center for Countering Digital Hate remain equally unafraid.

Earlier this week, the company formerly known as Twitter filed a lawsuit in federal court against the CCDH, after the organization in June published research that Musk didn’t like. The group found a rise in hate speech on Twitter since Musk purchased the company last year, and said X, as it’s now known, fails to take action against paying subscribers who post racist, homophobic, conspiratorial and other inflammatory content.

In an interview with CNBC, Ahmed said the CCDH has no plans to suspend its research into the spread of hateful content and other emerging problems it finds on the social media platform. Rather, Ahmed told staffers in a meeting after he heard about the lawsuit that they should “double down” on probing X.

“I’ve never, ever, ever walked away from a fight,” Ahmed said.

Ahmed, 44, lives in Washington, D.C., though he studied in the U.K. at the University of Cambridge. He founded the CCDH in 2018 after the death of Jo Cox, a U.K. Labour Party colleague and member of parliament, by a white supremist who was reportedly “a loner obsessed with Nazis.”

Lawyers representing X alleged in this week’s lawsuit that the CCDH improperly obtained access to social media analysis tool Brandwatch and also illegally scraped data from Twitter using other methods. The attorneys claimed the CCDH has used “flawed methodologies to advance incorrect, misleading narratives” that have driven away X’s advertisers, damaging its business.

In March, the CCHD published a study showing that since Musk took over Twitter, there’s been a 119% increase in tweets mentioning the grooming narrative, referring to a conspiracy theory that implies LGBTQ+ people are grooming children. The study was based on an analysis of 1.7 million tweets from the beginning of 2022 through February 2023. The CCDH said it obtained the tweets using a data-scraping tool and Twitter’s search function.

X said in its lawsuit that it’s seeking a jury trial, unspecified monetary damages, and wants to block CCDH and any of its collaborators or employees from accessing data provided by X to Brandwatch.

Ahmed declined to comment about the specifics of the case though he noted that X has not yet physically served him or the CCDH with a lawsuit.

He’s accustomed to the criticism.

Prior to the challenges from X, Meta and TikTok took issue with the CCDH’s research methodology after the group released reports alleging those platforms fostered misinformation and content that could harm the mental health of teenagers.

However, neither of those companies went so far as to sue the nonprofit or allege that it acted unlawfully.

The lawsuit from X follows a previous letter sent from another law firm representing the company, accusing the CCDH of false and misleading claims linked to a separate trademark-related law known as the Lanham Act.

Ahmed characterized Musk’s actions toward his organization as those of “a man who is desperately fishing around for ways to blame someone else.”

X did not respond to questions about the lawsuit or when it plans to serve CCDH with it. The company issued a statement to CNBC, reiterating prior comments and accusing the nonprofit of spreading false claims against X to stymie public discourse. Prior to the lawsuit, Musk referred to Ahmed as a “rat” and the nonprofit as “truly evil.”

Brandwatch and its parent company Cision didn’t respond to requests for comment.

No money from tech companies

Ahmed defended the CCDH against claims that it’s a “censorship organization,” and also shot down allegations in the complaint and from Musk that the group is covertly bankrolled by potential competitors or foreign governments.

“I made clear that we don’t take money from tech companies, social media companies, and we don’t take money from governments,” Ahmed said. “We take money from philanthropic trusts and the public. If people want to donate, they can donate to us here.”

The CCDH has provided evidence to the governments of the U.S. and U.K. on Internet harms, and advocated for the U.K.’s Online Safety Bill, which was designed to make social media companies more responsible for the safety of their users.

When it comes to Musk, Ahmed has a particular point to make: He doesn’t “understand how free speech truly works.”

He’s a “self-proclaimed champion of free speech,” Ahmed said, but he “doesn’t understand the marketplace of ideas.”

Ultimately, Ahmed’s conclusion is that, “Musk is behaving like a child who simply cannot take responsibility for the fact that he pooped in his own pants and it wasn’t someone else that did it for him.”

Earlier this week, three Democratic members of Congress sent a letter to Musk and X, accusing the world’s richest person of taking a “hostile stance” toward independent researchers. They said the studies have “raised legitimate and serious questions regarding X’s business practices since Mr. Musk’s acquisition.”

But Musk has his backers on the other side of the aisle.

House Judiciary Committee Chairman Jim Jordan, R-Ohio, sent a letter to the CCDH and Ahmed as part of a broader “censorship investigation.” The letter, which the CCDH confirmed it received on Thursday, said the committee is seeking documents from the nonprofit that show its “interactions” with the federal government, including the Biden administration, and social media companies.

“The Committee on the Judiciary is conducting oversight of how and to what extent the Executive Branch has coerced and colluded with companies and other intermediaries to censor speech,” Jordan wrote. “Certain third parties, including organizations like yours, appear to have played a role in this censorship regime by advising the government and social media companies on so-called ‘misinformation’ and other types of content — sometimes with direct or indirect support or approval from the federal government.”

Ahmed said that in the days since the X lawsuit was made public, the CCDH has received “hundreds of donations” and “so many messages of support” from organizations including Amnesty International, the Anti-Defamation League, Friends of the Earth, and Planned Parenthood.

Other groups that have voiced support for CCDH include LGBTQ advocate GLAAD, the Molly Rose Foundation, the Free Press, Check My Ads and Coalition for Independent Tech Research.

Ahmed said these organizations recognize what’s at stake, especially as Musk shows his increasing willingness to use his wealth and power to inject his ideologies onto a major communications platform.

There are “all these other groups who are all coming out going, no no, our information ecosystem is valuable,” Ahmed said. “We have the right to comment on it, on the private companies who administer significant parts of it.”

WATCH: Elon Musk has vision to make Twitter into ‘an everything app’ with X rebrand.

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August 4, 2023
Meta’s Threads will soon have search and web functions, Zuckerberg says

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Thilina Kaluthotage | Nurphoto | Getty Images

Meta’s Twitter-like Threads app will soon get a search function and be available to access via the web.

In a Threads post on Friday, Meta CEO Mark Zuckerberg said the new features will be “coming in the next few weeks.”

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“A good week for Threads,” Zuckerberg wrote. “The community here is on the trajectory I expect to build a vibrant long term app.”

Meta introduced Threads in July to much fanfare, and the app quickly shot up the charts as Zuckerberg capitalized on struggles that have beset Twitter — now known as X — and increased criticism of principal owner Elon Musk. But engagement on Threads has significantly declined over the past weeks as the novelty wore off, and some users grew frustrated with the app’s limited functionality.

Advertisers and creators have told CNBC that in order for Threads to become an important service, the real-time messaging app needs to have features that make it easier to search for trending topics and to find previous posts. And being able to access Threads on the web is particularly important if Meta wants to truly compete with X, which has long been popular on desktop for people at work.

Last week, Zuckerberg said on Meta’s earnings call that he’s “quite optimistic” about the future of Threads and that it was built by a small team. Still, the company is not going to monetize the app until it’s much bigger and more established, he said.

“Lots of work ahead but excited about the team’s pace of shipping,” Zuckerberg wrote on Friday.

WATCH: Are the Threads unraveling?

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August 4, 2023
Google, Microsoft, and Meta can’t stop talking about A.I. — here’s why Apple rarely mentions it

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Apple CEO Tim Cook arrives for an official State Dinner in honor of India’s Prime Minister Narendra Modi, at the White House in Washington, DC, on June 22, 2023.

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The most powerful technology companies simply cannot stop talking about artificial intelligence, and in particular, the “generative AI” flavor that can create human-like text, images, and code.

During calls after this week’s earnings reports, Alphabet CEO Sundar Pichai and his team said “AI” 66 times. Microsoft CEO Satya Nadella and his execs said it 47 times. And on Wednesday, Meta CEO Mark Zuckerberg and the Facebook executive team said the magic phrase 42 times, according to a CNBC analysis of transcripts.

But Apple barely talks about artificial intelligence, and you shouldn’t expect to hear much about it during the company’s earnings next week.

Its sober approach to the new technology contrasts deeply with its rivals, which are stoking excitement and elevating expectations every chance they get.

During May’s Apple earnings call, CEO Tim Cook only said “AI” twice, and that was in response to a question. During Apple’s two-hour software launch event in June, it never said the phrase, although it announced several new features powered with AI.

Apple execs instead use the phrase “machine learning,” which is more popular with academics and practitioners. Apple execs also prefer to talk about what software does for the user, such as organizing their photos, improving their typing, or filling out fields in a PDF, as opposed to the technology that makes all that possible.

Apple’s approach to AI as a core underlying component instead of the future of computing represents a way to present the technology to its consumers. Apple’s AI works in the background. And the company doesn’t yell about it the way some of the other companies do because it doesn’t need to.

Microsoft, Google and Meta are rallying everyone around AI, even though the future is murky

Google launched Bard AI, it’s own chatbot to rival Microsoft and OpenAI’s ChatGPT.

Jonathan Raa | Nurphoto | Getty Images

A closer look at executive remarks this week from earnings calls shows that while Meta, Microsoft, and Google are eager to sell the shovels for the AI gold rush, such as cloud services and developer tools, it’s still unclear how AI could change their most important products and when it could start bolstering balance sheets.

Google, for example, has announced its plans to revamp its search engine using an AI model called Search Generative Experience. Microsoft’s biggest new initiative is a $30-per-month “Copilot” subscription that integrates generated text or code from partner OpenAI’s ChatGPT into Word, Powerpoint, and other apps. Meta’s most recent investment in AI technology is its own large language model it calls LLaMA, which could underpin new kinds of social media chatbots or automatically generate online ads.

Meanwhile, Apple still makes the bulk of its money from iPhones, which generated $51.3 billion of its $94.84 billion in revenue during the company’s second fiscal quarter. Why talk a big AI game?

Besides, mega-cap tech companies signaled to investors earlier this week in earnings calls that the rollout of AI products could take a while.

In Microsoft’s case, Nadella tempered investor expectations for Copilot, signaling that growth would take time, and CFO Amy Hood said that its rollout would be “gradual.”

It could take until next year before investors understand how the Copilot subscription affects the company’s revenue. “In the second half of the next fiscal year, we’ll start getting some of the real revenue signal from it,” Nadella said.

Google and Pichai say that the company’s text-generating AI models will make its search engine better and could even answer questions that normal Google search can’t. From a business perspective, Pichai said, generative AI used for creating and serving ads will “supercharge” the company’s existing ads business, and there are “opportunities” for new kinds of ads with AI-generated search.

But Pichai still said it’s still “early days” for the new AI-powered search, and later, when pressed about how SGE might increase usage of the search engine, and therefore increase revenue, he said the company was experimenting.

“I think we are definitely headed in the right direction, and we can see it in our metrics and the feedback we’re getting from our users as well,” Pichai said.

Zuckerberg was effusive about AI technology and its applications in virtual reality, ad targeting, and recommending content from accounts users don’t follow.

He was particularly optimistic about a concept called “AI agents,” where software would be able to message business customers automatically without a human involved, or act as a coach, or be a personal assistant.

Still, Zuckerberg admitted he didn’t know how many people would use the new AI features.

“The reality is, we just don’t know how quickly these will scale,” Zuckerberg said. He said Meta was debating internally how much it should spend on servers for AI.

The peak of the hype cycle

Microsoft – Bing seen on mobile with ChatGPT4 on screen, seen in this photo illustration. On 12 March 2023 in Brussels, Belgium.

Jonathan Raa | Nurphoto | Getty Images

The slow rollout of revenue-generating AI products from Big Tech matters because many people in the technology industry believe that new foundational technologies go through a “hype cycle” based on research from analysis firm Gartner.

When a new technology is introduced, according to the hype cycle model, it gains lots of attention and investment as it reaches a “peak of inflated expectations.” But, as the deployment of the tech moves slower than initially expected, enthusiasm and investment dry up, in a “trough of disillusionment,” before maturing and becoming productive.

For now, shovel-makers and people seeking investment capital are benefiting from the AI boom. Nvidia stock has risen 220% so far in 2023 as investors have realized its GPUs are essential for the technology. Venture capital investment in AI startups has boomed, and many of those dollars are going to Nvidia for computer capacity, and to cloud providers for access to AI models.

But if everyday consumer applications for AI don’t catch on, then many AI companies could slip into the trough of disillusionment again. Analysts found earlier this month, for example, that downloads for OpenAI’s iPhone app slowed earlier this month after launching in May.

Some analysts are starting to understand that an investment opportunity based on new AI products won’t be immediate and that the costs could stack up.

“We cautioned investors that that process of translating early demand to large-scale implementations and recognized revenue will be a multi-year trend rather than an instantaneous flip of a switch,” JPMorgan analyst Mark Murphy wrote this week.

“We recommend investors invest elsewhere until Metaverse, Reels, Threads, Quest and Generative AI investments become accretive (if ever) to META’s [return on invested capital], rather than dilutive,” Needham’s Laura Martin wrote in a note.

UBS analyst Lloyd Walmsley wrote this week that Generative AI was still an “overhang” over Google.

“Management expressed optimism around the ability to solve for ‘deeper and broader’ use cases with Search Generative Experience (SGE), but we do not believe the company is out of the woods with management still describing monetization as having a ‘number of experiments in flight including (for) ads,’” Walmsley wrote.

Apple’s a product company

Apple iPhones are displayed at an Apple store in Chicago on Nov. 28, 2022.

Scott Olson | Getty Images

When Apple reports its earnings next week, analysts will likely press it on its plans for AI, given the industry-wide obsession, and especially after a recent Bloomberg report that said the company was developing a ChatGPT-like language model internally.

Last month, Apple announced new iPhone keyboard software that uses the same transformers architecture as GPT, showing that it has substantial internal development of AI models. It just doesn’t like to talk about products that aren’t out on the market yet to stoke investor anticipation.

Apple is unlikely to discuss AI at length next week as its mega-cap rivals did this week. During Apple’s earnings call in May, when asked about the technology, Cook quickly moved the conversation back to the company’s products and features.

“We view AI as huge and we’ll continue weaving it in our products on a very thoughtful basis,” Cook said.

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July 28, 2023
Meta’s Reality Labs has now lost more than $21 billion since the beginning of last year

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Meta reported second-quarter earnings on Wednesday and said that its Reality Labs unit, which develops virtual reality and augmented reality technologies needed to power the metaverse, logged a $3.7 billion operating loss.

The unit recorded $276 million in second-quarter sales, down from the $339 million in revenue it brought during the first quarter. Analysts polled by StreetAccount were projecting Reality Labs to record $421 million in sales and $3.5 billion in operating losses.

Shares of Meta were up about 5% after it reported an 11% pop in revenue as advertising rebounded and the company issued an uplifting sales forecast for the third quarter. It shows that Meta is still very much an ad company with a big cost center.

Last year, Meta’s Reality Labs unit lost a total of $13.7 billion while bringing in $2.16 billion in revenue, which is driven in part by the company’s sales of Quest-branded VR headsets. Reality Labs lost $3.99 billion during the first quarter. That puts its total losses at about $21.3 billion since the beginning of last year.

Meta said in its earnings report that it expects operating losses in its Reality Labs unit “to increase meaningfully year-over-year due to our ongoing product development efforts in augmented reality/virtual reality and investments to further scale our ecosystem.”

In June, Meta announced a VR subscription service dubbed Meta Quest+, which costs $7.99 a month and is compatible with the company’s Quest 2, Quest Pro and upcoming Quest 3 headsets. The subscription service lets people access two new VR games each month, and they will be able to play those games as long as they have active subscriptions.

Also in June, Zuckerberg revealed details about the Quest 3 headset just days before Apple announced its Vision Pro VR and AR headset that will cost a whopping $3,499 when it is released in 2024. The Quest 3 will be sold at a price starting at $499 and is 40% thinner than the Quest 2 and will contain a next-generation Qualcomm chipset, the company said.

Watch: Snapchat+, a subscription-based revenue stream, has hit 4 million subscribers

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July 26, 2023
Meta rolls out first feature update to Threads since launch earlier this month

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Instagram Threads, the Twitter clone Meta launched two weeks ago, is being updated to include new features, including a follows tab.

Cameron Roth, a software engineer for Instagram, shared a Threads post Tuesday, announcing additions to the app as part of an update to Apple’s iOS.

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The follows tab will presumably make it easier for people to see who is following them. Users will also be able to access a translate button to read text in other languages and more easily read posts from people they don’t follow. Roth said the iOS update includes some software bug fixes and loading improvements.

Threads was an instant hit for Meta, which reported a record 100 million sign-ups in just five days, eliciting defensive responses from Twitter founder Elon Musk and new CEO Linda Yaccarino. However, data from Sensor Tower and Similarweb showed that the service saw some drops in growth and engagement the following week.

Advertisers told CNBC they’re hoping for Threads to incorporate more features such as chronological feeds and the ability to search for hashtags, which could help them create better ad campaigns when Meta opens up that opportunity.

In a separate Threads post Tuesday, Roth said regarding the update that users “may need to restart your app to see some of these or otherwise wait until the end of the day!”

“We use a system of server-delivered flags which can take awhile to fully release,” he wrote.

WATCH: Threads is the perfect situation at the perfect time for Meta

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July 18, 2023
Google and Meta got customer data from tax prep firms, and lawmakers want a probe

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Sen. Elizabeth Warren (D-MA) speaks during a Senate Banking Committee hearing on Capitol Hill on June 13, 2023 in Washington, DC. The committee held the hearing to review “The Consumer Financial Protection Bureau’s Semi-Annual Report to Congress.”

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A group of lawmakers led by Massachusetts Democratic Senator Elizabeth Warren are calling on the Biden administration to investigate how tax prep software companies may have illegally shared customer data with tech platforms Google and Meta.

In a letter to Attorney General Merrick Garland, Federal Trade Commission Chair Lina Khan, Internal Revenue Service Commissioner Daniel Werfel and Treasury Inspector General for Tax Administration J. Russell George, the lawmakers laid out key findings from their own probe expanding on reporting from The Markup and The Verge, which initially revealed the data sharing. The FTC declined to comment on the letter and the other agencies named did not immediately respond to a request for comment.

In a story published last year, the publications jointly reported that tax prep software companies TaxSlayer, H&R Block, and TaxAct had shared sensitive financial information with Meta’s Facebook through a piece of code known as a pixel. The report found that Meta pixel trackers sent names, emails and income information to Meta, in violation of the platform’s policies.

The report also found that TaxAct had sent similar information to Google through its analytics tool, but that information did not include names.

After the initial report, Meta and Google both told CNBC they have policies against customers or advertisers sending them sensitive or identifying information. Some statements the tax prep companies provided to the publications at the time seemed to indicate the data sharing was done accidentally.

Building on the original reporting, the group of seven lawmakers opened their own probe into the extent of the data sharing. Among their findings released Wednesday, the lawmakers said that millions of taxpayers’ information had been shared with Big Tech firms through the tax prep software and that both the tax prep companies and tech firms were “reckless” in how they handled sensitive information. Although the companies said information shared would have been anonymous, the lawmakers found that experts believed it wouldn’t be hard to connect the data to individuals.

Sens. Ron Wyden, D-Ore., Richard Blumenthal, D-Conn., Tammy Duckworth, D-Ill., Bernie Sanders, I-Vt., Sheldon Whitehouse, D-R.I., and Rep. Katie Porter, D-Calif., joined Warren in the investigation and letter.

While the tax prep companies installed Meta and Google’s tools without fully understanding the privacy implications, according to the lawmakers, the two tech platforms failed to provide enough information about how they would collect and use the information gathered through their tools. Although Meta and Google both said they have filters to catch sensitive data that’s inadvertently collected, they seemed to be “ineffective,” the lawmakers wrote.

The probe also found that Meta tools used by TaxAct allegedly collected even more information than previously reported, including the approximate amount of federal taxes a person owed. They said that Meta confirmed it used data collected from the tax software providers “to target ads to taxpayers, including for companies other than the tax prep companies themselves, and to train Meta’s own AI algorithms.”

The group believes that their findings indicate the tax prep companies “may have violated taxpayer privacy laws,” which could result in criminal penalties “up to $1,000 per instance and up to a year in prison,” according to the letter.

After calling for the agencies to investigate and prosecute where necessary, the lawmakers noted that new policies may mitigate the issue in the future.

“We also welcome the recent IRS announcement of a free, direct file pilot next year, which will give taxpayers the option to file taxes without sharing their data with untrustworthy and incompetent tax preparation firms,” they wrote.

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WATCH: Facebook battles Apple over user privacy features in iOS update

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July 12, 2023
Microsoft-Activision ruling highlights Lina Khan’s struggles to fight tech

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FTC Chairwoman Lina Khan testifies during the House Energy and Commerce Subcommittee on Innovation, Data, and Commerce hearing titled “Oversight of the Securities and Exchange Commission,” in Rayburn Building on Tuesday, April 18, 2023.

Tom Williams | Cq-roll Call, Inc. | Getty Images

When a federal judge on Tuesday decided to reject the Federal Trade Commission’s request for a preliminary injunction to prevent Microsoft from completing its acquisition of Activision Blizzard, she also rejected FTC Chair Lina Khan’s vision of antitrust enforcement.

While the judge’s ruling doesn’t mean the deal is totally in the clear, since the FTC can appeal and the UK’s competition enforcer has also opposed the deal, it’s indicative of the existential challenge Khan’s enforcement strategy faces in the courts.

Fighting the $68.7 billion deal has been one of the FTC’s biggest swings yet under Khan, who President Joe Biden named chair in 2021. Khan first emerged in antitrust circles for her critiques of how antitrust enforcement overlooked potential abuses by Amazon.

But even as many in Congress have become more open to a different view of antitrust in the digital age, the courts still pose a major hurdle to newer theories about how online companies can amass and leverage power to stifle rivals.

Judge Jacqueline Scott Corley wrote that the FTC had not shown it was likely to prevail in its administrative challenge of the merger in its internal proceeding, based on the agency’s view that the deal is likely to substantially lessen competition. The FTC has argued that Microsoft might make some of its games exclusive to its own game consoles or diminish the experience of Activision games on rival services should the deal close. Microsoft has said it would instead make the games more widely available.

Corley agreed with Microsoft’s view.

“To the contrary, the record evidence points to more consumer access to Call of Duty and other Activision content,” she wrote.

She added that, “Despite the completion of extensive discovery in the FTC administrative proceeding, including production of nearly 1 million documents and 30 depositions, the FTC has not identified a single document which contradicts Microsoft’s publicly-stated commitment to make Call of Duty available on PlayStation (and Nintendo Switch).”

The ruling means that the parties are closer to being able to complete their merger by their July 18 deadline. But the FTC can still appeal, and the companies must still contend with the UK Competition and Markets Authority’s opposition to the deal.

“We are disappointed in this outcome given the clear threat this merger poses to open competition in cloud gaming, subscription services, and consoles,” an FTC spokesperson said in a statement. “In the coming days we’ll be announcing our next step to continue our fight to preserve competition and protect consumers.”

It’s not the first time a judge has looked dubiously on the FTC’s antitrust enforcement theories under Khan. A federal judge also ruled against the FTC’s attempt to block Meta’s acquisition of virtual reality fitness app maker Within Unlimited, which the agency argued may lessen competition in a nascent market.

Khan has continued to bring cases against tech companies that will face similar hurdles in the courts. The most notable might be the agency’s expected challenge of Amazon’s antitrust practices.

Khan’s defenders quickly critiqued Corley’s decision. Matt Stoller, director of research at the American Economic Liberties Project, wrote on Twitter that Corley “changed the law” in writing that “the FTC must show the merger will probably substantially lessen competition.” Stoller noted that the relevant merger law says the government must show “the effect of such acquisition may be substantially to lessen competition, or to tend to create a monopoly.”

“[W]hen a Biden judge – whose son works at Microsoft – lets the biggest tech merger of all time go through, we have a serious problem with the judiciary,” Stoller wrote. Corley disclosed her son’s job, which is not in the gaming division, at a hearing in June.

Regardless of the critiques, the ruling is another example of a judge who is unconvinced of Khan’s theories of how a tech company can leverage acquisitions in adjacent markets to harm competition. That’s the case even when the judge was appointed by the same president who named Khan to the FTC.

With new digital competition laws stalled in Congress, overcoming judges’ skepticism about newer theories on the application of existing laws will likely remain enforcers’ greatest challenge.

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WATCH: Judge denies FTC request for preliminary injunction to stop Microsoft-Activision deal

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July 11, 2023
Twitter’s desktop app sees surge in outages as Meta’s Threads takes off

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In this photo illustration, Threads logo seen displayed on a smartphone with the Twitter profile of Elon Musk in the background. Elon Musk is the current owner of Twitter. Meta will release a social media app called “Threads”, which will be a rival to Twitter. “Threads” is Instagram’s text-based conversation app.

Mateusz Slodkowski | Lightrocket | Getty Images

Twitter is experiencing a wave of outages just as Meta’s brand-new rival Threads service is racking up tens of millions of sign-ups.

Many Twitter users have reported outages over the past 24 hours, with problems seemingly skyrocketing around 9:30 a.m. ET on Friday, according to data from the Downdetector website. Downdetector accumulates its data from users who spot glitches and report them to the service.

About 70% of the Twitter outages appear related to its desktop service, Downdetector noted. Only 13% were tied to the mobile app.

Twitter’s TweetDeck service, which helps users manage multiple Twitter conversations, has also suffered downtime in recent days after the company announced that only verified users will be able to access it. However, the primary problem appears to be with the core Twitter app, the data shows.

Meanwhile, the Threads app has recorded 70 million sign-ups just a day after its official release as of Friday morning, Meta CEO Mark Zuckerberg wrote in a Threads post.

“Way beyond our expectations,” Zuckerberg said about the app’s immediate popularity.

On Thursday, Twitter’s new CEO, Linda Yaccarino, who succeeded owner Elon Musk at the helm a month ago, tweeted that the company was “often imitated,” a clear reference to Threads.

Twitter didn’t provide a comment for this story.

Watch: There’s more room in Meta’s multiple for upside.

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July 7, 2023
Meta’s Twitter rival Threads explodes to 70 million signups one day after launch

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In this photo illustration, the Threads logo by META is displayed on a smartphone with Twitter logo in the background. Threads is the new social network from Meta Platforms which was launched on the 5th of July 2023.

Omar Marques | Nurphoto | Getty Images

Meta’s new Twitter competitor Threads has exploded in growth in its first full day since its public debut Wednesday night, fueled by Instagram’s already massive userbase. The text-based social media platform already has 70 million sign-ups, Meta CEO Mark Zuckerberg said on Friday.

As of Thursday afternoon, The Verge reported that users had already posted more than 95 million posts and 190 million likes, based on internal company data it had viewed.

Meta did not provide updated engagement metrics for Threads but directed CNBC to Zuckerberg’s announcement on sign-up numbers.

The booming growth is helped along by the fact that Threads is tied to an existing social network, Meta’s Instagram. Users can sign up with their existing handles on Instagram and are able to retain some of their following as others sign up for the app.

“Meta only needs 1 in 4 Instagram users to use Threads monthly for it to be as big as Twitter,” Jasmine Enberg, principal analyst at Insider Intelligence, said in a statement. Twitter reported nearly 238 million monetizable daily active users in its last quarterly earnings report as public company last summer.

The app still has plenty of room to grow, having not yet launched in Europe, where Instagram’s chief said there is still some regulatory complexity to navigate.

Twitter owner Elon Musk appears to have already shown some concern about Threads, as his longtime lawyer Alex Spiro wrote a letter to Meta accusing the company of “unlawful misappropriation” of trade secrets.

“No one on the Threads engineering team is a former Twitter employee,” Meta’s communications director, Andy Stone, wrote on Threads in response to the letter. “That’s just not a thing.”

Still, growth alone won’t be enough to make Threads an alternative to Twitter that withstands the test of time. The app must also show that it can keep users engaged and coming back.

While Twitter is known for being heavily used by journalists, politicians and academics and is a place where news often breaks, Meta’s Threads could have a much broader audience and focus due to its tie-in to Instagram, which has different use cases as a visual-based platform. Plus, Meta has taken steps to de-emphasize political content on Facebook, a policy which, if carried over to Threads, would set it apart from Twitter.

“News hounds and avid Twitter loyalists aren’t likely to defect to Twitter, and Meta will need to keep Threads interesting to maintain the momentum once the novelty wears off,” Enberg wrote. “It’s also not a given that people will use Threads to keep up with news and world events like they do on Twitter, and the culture will be different. But that could work in Meta’s benefit: Even the most engaged Twitter users are fed up with the constant chaos and ad hoc changes, and Threads could offer a nice reprieve.”

Even so, many politicians have already signed up for the service. Axios reported that as of Thursday evening, more than a quarter of Congress’ 535 members across both chambers had created accounts, as well as half a dozen Republican presidential candidates and top White House aides.

Many advertisers who are used to working with Meta are also likely to welcome an alternative to Twitter, especially if they view it as more brand safe. The company has said Instagram’s community guidelines will also apply to Threads.

WATCH: Meta’s Threads is not Twitter killer, but will pose real threat to Twitter’s growth: Analyst

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July 7, 2023
Meta CEO Mark Zuckerberg touts to employees ‘incredible breakthroughs’ the company has seen in A.I.

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Mark Zuckerberg, CEO, Meta Platforms, in July 2021.

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Meta CEO Mark Zuckerberg wants his workforce to know the company is in the middle of the artificial intelligence race.

During a meeting with employees Thursday in the Hacker Square pavilion at Meta’s Menlo Park headquarters, Zuckerberg discussed Meta’s AI efforts, a spokesperson confirmed. It was the first event held there since before the Covid-19 pandemic.

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Zuckerberg addressed Meta’s recent layoffs at the beginning of the gathering but focused mostly on the company’s projects in the burgeoning field of generative AI, which uses written prompts to create conversational text and compelling visuals.

“In the last year, we’ve seen some really incredible breakthroughs — qualitative breakthroughs — on generative AI and that gives us the opportunity to now go take that technology, push it forward, and build it into every single one of our products,” Zuckerberg said, according to a statement shared with CNBC. “We’re going to play an important and unique role in the industry in bringing these capabilities to billions of people in new ways that other people aren’t going to do.”

Axios first reported on the meeting and the AI projects Meta is pursuing.

While Meta has long touted its investments in AI, the company hasn’t been at the center of the conversation regarding the latest consumer applications, which have come from Microsoft-backed OpenAI, Google and Microsoft itself.

At the meeting Thursday, Zuckerberg and other Meta executives detailed some of the company’s work incorporating generative AI models into the metaverse, the nascent virtual world Meta is sinking billions of dollars into every quarter to try and make a reality. In particular, they talked about how AI can help create the 3D visuals for the metaverse.

Meta said it’s giving employees access to several internal generative AI tools to help develop prototypes, and the company is hosting a hackathon for workers to show off their AI projects.

The company also plans to debut a service for Instagram users that will let them modify photos via text prompts and share them in the app’s Stories feature.

Additionally, Meta plans for its Messenger and WhatsApp services to eventually include the ability for users to engage with more sophisticated AI-powered chatbots as a form of entertainment.

Meta executives told employees the company is still committed to releasing AI research to the open-source community. However, they didn’t address a recent letter from Sens. Richard Blumenthal, D-CT, and Josh Hawley, R-MO, expressing concern over a public leak of the company’s LLaMA language model and the “the potential for its misuse in spam, fraud, malware, privacy violations, harassment and other wrongdoing and harms.”

Last week, Meta told employees they will need to work at the company’s offices three days a week, starting in September. Amazon and Google have also altered their previous work-from-home policies in recent months.

WATCH: Meta has a lot of work to do before its VR headset becomes mainstream

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June 8, 2023
Twitter’s top users are posting less since Musk takeover last year, Pew Survey shows

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Twitter CEO Elon Musk announced changes to the platform’s direct messages feature including the introduction of encryption.

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Twitter’s power users are still coming to the app, but fewer are posting on it since Elon Musk’s acquisition late last year, according to a survey from Pew Research Center.

“The Center’s new analysis of actual behavior on the site finds that the most active users before Musk’s acquisition – defined as the top 20% by tweet volume – have seen a noticeable posting decline in the months after,” the survey’s authors wrote on Wednesday. “These users’ average number of tweets per month declined by around 25% following the acquisition.”

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Additionally, about six in ten U.S. adults who have used Twitter in the past year said they’ve recently taken breaks from the service, and a quarter of the group indicated they will not use Twitter a year from now, the survey said.

The new data underscore the challenges facing Twitter’s incoming CEO, Linda Yaccarino, who will replace Musk. She’ll be taking over the ailing social media service, which has lost a number of advertisers over the past few months on concerns that racist and otherwise inappropriate content has flourished since Musk’s takeover.

Yaccarino, who recently resigned from her position as NBCUniversal global advertising chief, will need to repair relationships with Twitter’s advertisers and get a grasp on content moderation. Musk has slashed the company’s workforce by about 80% to roughly 1,500 employees, getting rid of some people that he should’ve kept, he acknowledged in an interview with CNBC on Tuesday.

“Desperate times call for desperate measures,” Musk said. “So there’s no question that some of the people who were let go probably shouldn’t have been let go.”

The Pew survey also showed most of Twitter’s content is produced by a small group of power users.

“Since Musk’s acquisition, 20% of U.S. adults on the site have produced 98% of all tweets by this group,” the survey said.

Upon request for comment, Twitter responded with its now customary poop emoji.

Watch: Elon Musk on Twitter’s new CEO

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May 17, 2023
Apple reports better-than-expected quarter driven by iPhone sales
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Apple reported second-fiscal quarter earnings on Thursday that beat Wall Street’s soft expectations, driven by stronger-than-anticipated iPhones sales. Apple CEO Tim Cook told CNBC that the quarter was “better than we expected.”

However, Apple’s overall sales fell for the second quarter in a row. The tech giant’s shares rose nearly 2% in extended trading, and continued climbing when Apple gave forecast data points about the current quarter.

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Here’s how the company did versus Wall Street expectations per Refinitiv consensus expectations:

EPS: $1.52 per share vs. $1.43 expected

Revenue: $94.84 billion vs. $92.96 billion expected

Gross margin: 44.3% vs. 44.1% expected

Apple reported $24.16 billion in net income during the quarter compared to $25.01 billion in the year-earlier period. Total revenue was off 3% from $97.28 billion in the prior quarter.

Here’s how Apple’s individual product lines did versus StreetAccount consensus expectations:

iPhone revenue: $51.33 billion vs. $48.84 billion expected

Mac revenue: $7.17 billion vs. $7.80 billion expected

iPad revenue: $6.67 billion vs. $6.69 billion expected

Other Products revenue: $8.76 billion vs. $8.43 billion expected

Services revenue: $20.91 billion vs. $20.97 billion expected

Apple didn’t provide formal guidance, continuing its practice that dates back to 2020 and the start of the Covid-19 pandemic. Management typically provides some data points on a call with analysts.

Apple finance chief Luca Maestri said the company expects overall revenue in the current quarter to decline about 3%.

“We expect our June quarter year-over-year revenue performance to be similar to the March quarter assuming that the macroeconomic outlook does not worsen from what we are projecting today for the current quarter,” Maestri said on a call with analysts. He added the company is facing macroeconomic challenges in digital advertising and mobile gaming, which is part of Apple’s services business.

The highlight of Apple’s report was iPhone sales, which grew from the year-ago quarter even as the broader smartphone industry contracted nearly 15% during the same time, according to an IDC estimate.

IPhone revenue increased 2% during the quarter that ended April 1, suggesting that parts shortages and supply chain issues that had hampered the product for the last few years — including an iPhone factory shutdown late last year — had finally abated.

“It was quite a good quarter from an iPhone point of view, particularly relative to the market when you look at the market stats,” Cook told CNBC’s Steve Kovach.

Chief Executive Officer (CEO) of Apple Tim Cook waves to people during the opening of the first Apple Inc. flagship store in Mumbai, India on April 18, 2023.

Imtiyaz Shaikh | Anadolu Agency | Getty Images

Apple’s Mac and iPad businesses didn’t fare as well. The company warned last quarter that both business segments would decline, partially due to parts shortages but they fell further than expected.

Apple’s Mac sales were off more than 31% to just over $7.17 billion. But that’s a difficult comparison from the year-earlier period when Apple was still benefiting from the end of a pandemic boom in PC sales and a shift to its own chips that offer longer laptop battery life.

“There’s really two reasons for that,” Cook said. “One is the macro situation in general. And the other is where we’re still comparing to the very difficult compare of the M1 MacBook Pro 14 and 16-inch from the year-ago quarter.”

Revenue from iPads declined nearly 13% to $6.67 billion.

Apple’s Services business includes monthly subscriptions, revenue from Apple’s App Store, warranties and search-licensing revenue from companies like Google. Apple reported $20.9 billion in services revenue, a 5.5% year-over-year increase, signaling the company’s highest-margin business line continues to grow.

Apple’s wearables division, including Apple Watch and headphones such as AirPods, dropped 1% during the quarter, beating analyst expectations. Last fall, the company released a more expensive Apple Watch, called Ultra.

Apple’s China regional business, which includes the mainland, Taiwan and Hong Kong, reported $17.81 billion in sales, down from last year’s $18.34 billion. Analysts had hoped that China’s demand for electronics would rise in the quarter as the company exits out of Covid-era lockdowns and other restrictions.

While sales shrunk in most regions that Apple monitors, they grew in the Asia Pacific region to $8.11 billion.

Cook was optimistic about Apple’s prospects in India after his visit last month to the country where he opened Apple stores and met with politicians.

“The switcher and first-time buyer metrics look very good there for India,” Cook said. Apple uses the term “switcher” to refer to first-time iPhone buyers who previously had Android devices.

As expected, Apple’s board authorized $90 billion in share repurchases and dividends. Apple said it paid $23 billion in buybacks and dividends in the March quarter. Apple also raised its dividend 4% to 24 cents per share.

Cook also said that Apple was not planning layoffs like those that other big tech companies have started over the past year. “I view that as a last resort and, so, mass layoffs is not something that we’re talking about at this moment,” he said.
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May 4, 2023
Qualcomm gives light forecast, phone chip sales fall 17%
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Cristiano Amon, president and CEO of Qualcomm, speaks during the Milken Institute Global Conference on May 2, 2022, in Beverly Hills, Calif.

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Qualcomm reported second-quarter earnings on Wednesday that were in line with analyst expectations but saw sales from handset chips, a core business for the company, decline 17% on an annual basis.

Qualcomm shares fell over 2% in extended trading.

Here’s how the chipmaker did versus Refinitiv consensus estimates:

EPS: $2.15 per share, adjusted, versus expectations of $2.15 per share

Revenue: $9.27 billion, versus expectations of $9.1 billion

In the quarter ending in March, Qualcomm said net income fell 42% to $1.70 billion, or $1.52 per share, from $2.93 billion, or $2.57 per share, a year ago.

Qualcomm said it expected around $8.5 billion in sales in the current quarter, short of Wall Street expectations of $9.14 billion. Analysts were expecting current-quarter earnings guidance of $2.16 per share, but Qualcomm said it expected it that to be around $1.80.

Qualcomm CEO Cristiano Amon in a statement blamed the results on a challenging environment, and the company said it had not seen evidence that smartphone sales are recovering in China. The smartphone market is looking at a tough 2023, with shipments for the global market declining over 14% in the first quarter, according to IDC.

Qualcomm’s chip segment, called QCT, sells smartphone processors, automotive chips, and other parts for advanced electronics. It declined 17% to $7.94 billion in revenue during the quarter.

The biggest part of QCT’s sales come from handset chips, which are the processors at the heart of most Android phones. Qualcomm reported $6.11 billion in handset sales, down 17% from last year.

Qualcomm’s automotive business, which includes chips and software for cars, is still small, although it showed 20% growth during the quarter to $447 million in revenue. It’s reported as part of QTL.

Qualcomm’s licensing segment, QTL, which sells access to technologies needed for cellular service, reported an 18% annual decrease in revenue to $1.29 billion.
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May 3, 2023
AMD revenue drops 9% as PC chip sales decline sharply
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AMD Chair and CEO Dr. Lisa Su delivers a keynote address at CES 2023 at The Venetian Las Vegas on January 04, 2023 in Las Vegas, Nevada.

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AMD reported better-than-expected revenue and earnings for the first quarter, but the stock dropped 6% in extended trading on Tuesday after the chipmaker issued guidance for the current period that trailed analysts’ estimates.

Here’s how the company did versus Refinitiv consensus estimates for the quarter ended in December:

EPS: 60 cents per share adjusted vs. 56 cents per share expected

Revenue: $5.35 billion vs. $5.3 billion expected

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AMD said it expected about $5.3 billion in sales in the current quarter, versus Wall Street estimates of $5.48 billion. AMD CEO Lisa Su said in a statement that the company sees “growth in the second half of the year as the PC and server markets strengthen.”

The company’s net loss swung to $139 million, or 9 cents per share, from a net income of $786 million, or 56 cents per share, during the year-earlier period. AMD excludes certain losses on investments and acquisition-related costs from its earnings.

Revenue dropped 9% from $5.89 billion a year earlier.

The biggest decline came in AMD’s client group, which includes sales from PC processors. AMD reported $739 million in sales in the category, a 65% decrease from $2.1 billion in sales during the same period last year.

AMD’s report comes as the PC industry is in a deep slump, with shipments dropping 30% in the first quarter, according to IDC. Last week, Intel, AMD’s primary competitor in the PC and server chip markets, reported that its overall sales declined 36%.

“We believe the first quarter was the bottom for our client processor business,” Su said.

AMD’s data center segment sales edged up to $1.295 billion from $1.293 billion during the year-earlier period. The company said the category is likely to grow in the current quarter.

“I would say from an overall market standpoint, I think enterprise will still be mixed, with the notion that we expect some improvement. Depends a little on the macro situation,” Su said.

Sales in its embedded segment of less powerful chips for networking soared to $1.56 billion from $595 million year over year, partially due to additional revenue from the company’s purchase of Xilinx.

AMD’s gaming segment, which includes graphics processors for PCs as well as chips for consoles like Sony PlayStation 5, reported $1.76 billion in sales, down slightly from $1.88 billion last year.

Correction: The $5.3 billion revenue expectation was misstated in an earlier version.
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May 2, 2023
TikTok has tens of thousands of moderators in Ireland looking for offensive content, CEO says

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TikTok CEO Shou Zi Chew testifies before the House Energy and Commerce Committee in the Rayburn House Office Building on Capitol Hill on March 23, 2023 in Washington, DC.

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To spot and remove offensive posts, TikTok has tens of thousands of Ireland-based workers tasked with content moderation, CEO Shou Zi Chew said on Thursday.

Speaking at the TED2023 Possibility conference in Vancouver, British Columbia, Chew said TikTok has “clear community guidelines” and that executives do not “make any ad-hoc decisions” when dealing with “bad actors” on the Internet who post offensive content on the app.

“Based on that, we have built a team that is tens of thousands of people plus machines in order to identify content that is bad, and actively proactively remove it from the platform,” Chew said.

TikTok, which is owned by China’s ByteDance, is under intense pressure from U.S. lawmakers, who want to ban the app over over concerns that it poses a threat to national security. Chew’s comments come weeks after the CEO withstood a barrage of tough questioning from U.S. legislators, who have also criticized TikTok for failing to prevent the spread of offensive content on its platform or address its contribution to a rise in teenage depression.

“As a company, our goal is not to optimize and maximize time spent,” Chew said on Thursday, adding that, when people are glued to their smartphone screens TikTok “will proactively send you videos to tell you to get off the platform.”

The harmful content problem is not unique to TikTok. U.S. rivals including Meta, parent of Facebook Instagram, and Google’s YouTube have faced similar questions from lawmakers.

Chew said TikTok takes the matter seriously.

“We really encourage parents to have these conversations with their teenagers of what is the right amount of screen time,” Chew said. “I think there’s a healthy relationship that you should have with your screen and, as a business, you know, we believe that that balance needs to be met.”

Chew also brought up TikTok’s Project Texas initiative, which is at the heart of the company’s effort to reassure the public that the data of U.S. users will remain on domestic soil and won’t fall into the hands of foreign governments, most notably China.

Although TikTok is partnering with Silicon Valley software vendor Oracle to store and protect user data, U.S. lawmakers are still concerned that the Chinese government could snoop on U.S. citizens or potentially spread propaganda via the TikTok app.

“I can say that we are building all the tools to prevent any of these actions from happening,” Chew said. “And I’m very confident that with an unprecedented amount of transparency that we’re giving on the platform, we can reduce this risk to as low at zero as possible.”

WATCH: How TikTok ban will benefit other social media giants like Meta and Twitter

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April 20, 2023
Why India is so important to Apple

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Tim Cook, Apple’s Chief Executive Officer (CEO) greets the media with folded hands outside the Apple store at Jio World Drive mall, Mumbai, India, April 18, 2023.

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Apple CEO Tim Cook is in India this week. He’s opened two new Apple stores, is scheduled to meet with Prime Minister Narendra Modi, and he’s seeing sights and visiting customers in the country.

The international trip is the strongest sign yet that India has become a huge strategic focus for Apple as supply chains move away from China and its smartphone market is increasingly saturated with iPhone owners.

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India could echo the role China has played in Apple’s business for the last 15 years: A massive market with an expanding middle class to power sales growth, and potentially a home base for the production of millions of Apple devices.

Analysts say that India’s large population and maturing economy is ideally situated for Apple to make inroads by increasing marketing efforts and offering retail in the country. At the same time, India’s government is eager to work closely with Apple to make it possible to manufacture in the country, CNBC reported.

There’s room for Apple to grow on the subcontinent: Apple has less than 5% of the smartphone market share in India, versus about 18% in China, said Angelo Zino, senior analyst at CFRA research. The bulk of smartphone sales in both countries use versions of the Android operating system created by Google.

“As you look at India today, it’s very similar to China 15 or 20 years ago,” Zino said. “It’s really that natural wealth effect over time that’s going to help Apple really penetrate and see significantly higher revenue potential in India.”

The opportunity could be massive: Apple did $74 billion in sales in China, Hong Kong, and Taiwan in fiscal 2022. That’s about 18% of Apple’s total revenue during the period.

India is not there yet. It’s reported in a category with other markets called “rest of Asia Pacific,” which reported only $29 billion in sales during the same time period.

Corporate filings in India covered by local media suggest that Apple’s sales in the country were about $4 billion in fiscal 2022, and Bloomberg reported earlier this week that Apple reported nearly $6 billion in sales in the year ending in March.

Cook has also made the India-China comparison to investors.

“We are, in essence, taking what we learned in China years ago and how we scale to China and bringing that to bear,” Cook said on an earnings call earlier this year.

Nearly all Android

India is the largest market that the iPhone hasn’t fully cracked, meaning it is critical for sales growth.

Cook boasted in February that the company was successfully wooing “switchers” in the country. That’s Apple’s word for previous Android phone owners who have decided to buy their first iPhone. Cook said in February that Apple had its best sales quarter ever for iPhones in India in the quarter ending in December.

Indians who buy iPhones are much more likely to be “switchers” than customers elsewhere because Android dominates the Indian market, led by Samsung and several Chinese brands. Android had over 95% of market share in the country, according to Statcounter.

The main reason is price. Most phones sold in India are priced below even the least-expensive new Apple iPhone. Industry analyst IDC estimated in February that the average selling price of a smartphone in India is $224, which had increased 18% in 2022. Apple’s entry level phone — the iPhone SE — retails for $429 in the U.S.

One way for Apple to address this gap is by allowing customers to pay for their phones in installments, or giving them a discount for trading in an older device. Cook mentioned these strategies when he was asked about India in February.

“There’s been a lot done from financing options and trade-ins to make products more affordable and give people more options to buy,” Cook said.

The two physical Apple stores opening this week and the online Apple store which launched in the country in 2020 are also expected to boost sales.

‘Make in India’

The second part of the strategy is to build Apple products in the country, a massive project that requires not only Apple’s attention, but also efforts from its manufacturing partners and local and national governments.

Nearly all iPhones are currently assembled in China, which has caused some problems over the past five years, starting with trade tensions and possible tariffs during the Trump administration, and extending to more recent supply chain disruptions caused by Covid and China’s Covid policies, which led to sales shortfalls.

India could end up being a big winner as Apple looks for non-Chinese manufacturing options. In January, India’s commerce minister told CNBC that Apple was manufacturing its latest iPhone 14 in the country and had a goal to produce as many as 25% of all iPhones in the country.

Apple’s primary manufacturing partner, Foxconn, which oversees a large portion of the assembly of new iPhones in China, is expanding in India, too, reportedly building a $700 million plant for iPhone parts in Bangalore.

In another parallel to China, the Indian government is eager to embrace Apple and use it as a symbol to attract other high tech firms to the country for manufacturing and development. Over the past 20 years, Chinese governments at multiple levels have worked to make massive factories like Foxconn’s Zhengzhou factory — known as “iPhone City” — possible.

Modi wants to discuss Apple’s plans for manufacturing around the country and creating manufacturing jobs, CNBC’s Seema Mody reported. He also wants to know about the challenges Apple has faced in growing its user base in the country.

Not so fast

This isn’t the first time that investors have been excited about Apple’s potential in India, and some analysts warn that it may take a while before it becomes a huge market.

“I’ve told investors this: All the all the hype you’re hearing about India this week is great,” Zino said. “I mean, it is a massive opportunity in our view, over the next decade, but don’t expect things to change overnight.”

Apple has also faced challenges in its early experiments manufacturing in the country, most notably at a Wistron factory in Bengalaru assembling older model iPhones, which erupted in a labor riot in late 2020.

Apple has had its eyes on an India expansion since at least 2016, when Cook previously met Modi.

At that meeting, Cook told Modi about the potential for manufacturing and retailing Apple goods in the country. Now, six years later, Cook is back in India to open up the company’s first two owned-and-operated retail stores.

Apple was bullish on India back then, too: “India will be the most populous country in the world in 2022,” Cook told CNBC’s Jim Cramer at the time, saying it had “huge market potential.”

Apple’s long-term strategy in India is best summarized by a quote Cook gave to local media during his 2016 trip to the subcontinent.

“We are putting enormous energy in here, and we are not here for a quarter, or two quarters, or the next quarter, or the next year, or the next year, we are here for a thousand years,” Cook said.

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April 18, 2023
Goldman Sachs is watching for ‘cannibalization’ from Apple’s new savings account

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David Solomon, chief executive officer of Goldman Sachs Group Inc., during an event on the sidelines on day three of the World Economic Forum (WEF) in Davos, Switzerland, on Thursday, Jan. 19, 2023.

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Goldman Sachs CEO David Solomon isn’t worried about Apple’s new savings account overshadowing its own Marcus offerings, but he said on Tuesday he’s watching closely for “cannibalization.”

The Wall Street firm reported first-quarter results on Tuesday, a day after Apple launched its new savings accounts with an annual percentage yield over 4%. The new accounts carry Apple’s brand and are administered through the iPhone, but Goldman Sachs is the company’s financial partner.

“We’ve obviously worked very closely at the overlap between who holds credit cards and who has a Marcus deposit and that overlap is small,” Solomon said on his company’s earnings call. “But we’ll obviously watch closely to see whether or not there’s any cannibalization.”

Solomon added that the Apple offering “is a way for us to try to open up another deposit channel” and said “it’s always good for us to broaden our deposit base.”

The Apple-Goldman relationship is unique in that it brings together two historic brands in very different markets and underscores the degree to which some tech giants are jumping into financial services, potentially as competitors. Apple builds features for the iPhone and its Wallet app, like its Apple Card credit card, while Goldman is the actual bank behind the company’s financial services.

Goldman has announced plans to become a large digital bank, perhaps competing at times with Apple to sign up new customers. For example, Goldman offers high-yield savings accounts through Marcus. CNBC has previously reported that the bank’s consumer-focused division, which handles Marcus and Apple partnerships, has struggled with shelved projects, leadership turnover and regulatory probes.

Solomon said Goldman would welcome the deposits from Apple’s savings account and would deploy them within its own client base.

WATCH: Apple’s efforts to ramp up supply chain and sales to consumers in India are both very important

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April 18, 2023
The 5 Biggest Trends Changing Mobile Entertainment | Entrepreneur

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Opinions expressed by Entrepreneur contributors are their own.

Mobile entertainment is now a multi-billion-dollar global industry, evolving at breakneck speed as technological advances unlock new possibilities and shape consumer preferences in new and unexpected ways.

Here is a look at the top five trends changing this industry today:

1. Bite-sized, mobile-first entertainment

Mobile phones and tablets have become ubiquitous, and user expectations are shifting towards mobile-first experiences optimized for smaller screens as a result. At the same time, leisure time is increasingly becoming a luxury as the pace of life for the active part of the population continues to speed up. One consequence is that users are increasingly drawn to content that can be enjoyed quickly and easily on the go. We have witnessed the rise of platforms like TikTok, Instagram Reels, YouTube Shorts and Yepp, serving up user-generated short-form content to a broad range of audiences.

While there is a lot of discussion about the addictive properties of short-form entertainment, screen time regulation and age restrictions for platforms that offer bite-sized mobile fun, one thing is clear — this type of content has true mass appeal and is likely to remain a major fixture in the mobile entertainment space for the foreseeable future.

Related: 4 Tech Trends Shaping the Future of Media and Entertainment

2. Better connectivity

More reliable connectivity, faster speed and greater proliferation of 5G are also transforming mobile entertainment in their own ways. Better connectivity enables developers to serve up more interactive experiences and data “heavy” formats, such as video streaming and conferencing, audio streaming, podcasting and networked gaming. This democratizes the creation of high-quality live content, which is no longer the exclusive turf of big broadcasting corporations, nor is it reliant upon wifi connectivity and a desktop device.

In addition, the speed and coverage of 5G networks enable more precise location-based services. These enhance mobile entertainment experiences, such as augmented reality games or virtual tours, enabling a more immersive user experience.

With the ability to provide higher-quality and more engaging content, mobile entertainment businesses can unlock new revenue streams, such as subscription-based services or pay-per-view options. By opening the door to more prosperous, more interactive, and more immersive content that can be consumed on the go, improved connectivity directly impacts the possibilities for entertainment on mobile devices and fuelling industry growth.

3. AI and machine learning

Artificial intelligence (AI) has a profound effect on mobile entertainment. Using AI-based tools such as machine learning helps developers improve and optimize backend processes like streamlining repetitive tasks, improving content moderation, and enabling leaner teams to achieve results. It also helps provide the more targeted, personalized entertainment experience that consumers have come to expect – serving up content based on a user’s interests and past viewing behavior.

While AI is also making it easier to generate content, including text, images and video, users are increasingly looking for content that feels authentic and relatable – something that is still hard, if not impossible, for AI to produce.

Therefore, when it comes to funny videos, fun memes and similar entertainment, user-generated content is still king for now, while AI works backstage to enhance how it is delivered and consumed.

Related: The FBI Says Hackers Are Using Public Phone Chargers to Steal Your Information. Here’s How To Avoid Falling Victim to the Scam.

4. Social media integration

An argument has been made that mobile technologies are making us less sociable as a society, with some even ringing alarm bells that the art of casual in-person communication is in danger of being lost. After all, look around when riding the subway, and you’ll see most of your fellow passengers with their heads bent over their mobile devices, completely oblivious to their surroundings and more often than not entirely uninterested in striking up any conversations with their fellow passengers (which is not such a bad thing, to be honest). However, within the confines of the digital world, the opposite trend is underway, and consumers increasingly expect entertaining content that is much more social and interactive.

Users are no longer passive consumers who just want to play a game or watch a video. Increasingly, they prefer to interact with other players, share their memes, comment on the videos they watch and otherwise engage with their digital communities and audiences. This trend is prompting the integration of social media functionality into mobile entertainment apps, providing more opportunities for users to interact with others online and within their digital communities.

Related: How to Think Outside Your Industry and Revolutionize the Customer Journey

5. AR and VR

Advances in augmented reality (AR) and virtual reality (VR) tech have opened new possibilities for mobile entertainment. AR technology allows users to overlay digital content on top of the real world, creating a more engaging and interactive experience for users. Sharing features within social apps enable users to capture and share their AR experiences, such as swapping faces in photos or putting funny filters on images. AR also enables location-based experiences in social apps, which can be used for real-world events or virtual events. Users can interact with digital content tied to their physical location, participate in AR-based scavenger hunts and other location-based games, or engage in pretend play, such as trying on countless pairs of e-sneakers.

As a result of the many AR- and VR-enabled features coming to the market, consumers are starting to expect more immersive, personalized, interactive, real-time, multimodal, and accessible experiences, prompting a higher level of competition among gaming and mobile entertainment companies to meet these expectations.

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Max Kraynov

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April 17, 2023