Two successful fighters

Facebook and Apple are currently engaged in bitter disputes over Apple’s new data rules. In the meantime, your business is still going well.

A photo collage shows Facebook founder Mark Zuckerberg and Apple CEO Tim Cook

Apple and Facebook are not on good terms these days. The two companies have been fighting for months over the new data rules that Apple is introducing with the latest version of the operating system for its iPhones. The changes are seen as a threat to Facebook’s advertising business. They were announced last year, and the update was officially released earlier this week.

While the two companies argue about this, their business continues to do well. They underscored this with their quarterly reports, which they presented almost at the same time on Wednesday after the market closed. Both tech giants have far exceeded analyst expectations. The share price of Facebook rose at times by more than six percent, Apple’s share was up around four percent. Apple currently has a market capitalization of more than $ 2.2 trillion, making it the highest rated American company.

Facebook raised the dispute with Apple when it presented its numbers. The social network said it expects the new iPhone software to have a negative impact on its advertising business in the second quarter. The controversial new function shows iPhone users a window when opening apps, which requires them to give their express consent to have online activities tracked via “tracking”. Until now, this consent was a prerequisite and tracking had to be deactivated manually. For Facebook, whose advertising business is based on the analysis of user data, it would be a severe blow if many users refuse tracking. CFO Dave Wehner called the effect on the social network “manageable” in a conference call. However, this would make it more difficult for many smaller companies to use their advertising budgets effectively.

German associations file a complaint about Apple

Facebook isn’t the only company complaining about Apple. At the beginning of this week, a group of German media, internet and advertising associations filed a complaint with the Federal Cartel Office. They called Apple’s new rules “inadmissible”. Apple holds against it, the innovations serve to protect the privacy of iPhone users. CEO Tim Cook said on Wednesday that the reaction of Apple customers has been very positive so far.

In addition to the iPhone update, Facebook also named new regulations as a possible burden on the advertising business this year. In the first quarter, however, there was still no sign of a slowdown. Facebook reported a 48 percent jump in sales to $ 26.2 billion, analysts had expected an average of $ 23.7 billion. Net income nearly doubled to $ 9.5 billion. Earnings per share were $ 3.30, analysts had expected $ 2.37. The good performance came as no surprise because in the past few days, competitors such as the Google holding company Alphabet and Snap had presented better than expected figures.

Apple reported a jump in sales of 54 percent to $ 89.6 billion for the past quarter. Analysts had expected an average of $ 77.4 billion. Sales of the iPhone alone, by far the company’s most important product, rose 66 percent to $ 47.9 billion. Apple is benefiting from its “iPhone 12” model range, which it launched last fall. These are the first versions of the device to work with the new 5G cellular standard.

There was also significant sales growth in all other divisions. The services, which are becoming more and more important for Apple, brought in 16.9 billion dollars, 27 percent more than in the previous year. This category includes, for example, the App Store, in which programs for Apple products are sold, the Apple Pay payment service, and the Apple Music music platform. Sales of Macintosh computers rose 70 percent to $ 9.1 billion, iPads grew by 79 percent to $ 7.8 billion, and the Apple Watch digital watch and Airpod headphones division posted a plus of 25 percent to also $ 7.8 billion. Apple’s net profit more than doubled to $ 23.6 billion. Earnings per share of $ 1.40 were 41 cents better than expected.

For the next quarter, Apple gave no concrete forecast, but warned that the current chip shortage would be reflected in the business. CFO Luca Maestri said in a conference call that delivery bottlenecks could cost the company between $ 3 billion and $ 4 billion in revenue.