2022 Tech Overview
2022 Tech Overview: Twitter, Meta & Apple
From the Cambridge Analytica scandal to Twitter’s purge of fake accounts, hardly a day goes by without a new narrative developing in the tech industry.
More recently, the broader economic climate has negatively affected the industry. Let’s explore some significant trends shaping the industry and what they mean for the future.
From Elon Musk offering to purchase Twitter; to Twitter issuing a lawsuit against Musk; to Musk acquiring Twitter and firing 50% of its employees – to say Twitter and Elon Musk have had a tumultuous relationship is an understatement.
Whatsmore, since the Twitter acquisition, Musk has worked tirelessly to restructure the company. Rumors have spread he is currently sleeping at the Twitter headquarters until he fixes the company. So what is all the fuss about?
Musk claims, “There’s a massive negative cash flow, and bankruptcy is not out of the question,” he also stated Twitter is losing $4 million daily.
The exact reasons Twitter’s financial situation is so poor are unclear. Still, based on some of the comments made by the new owner, it is likely the company has become overly bureaucratic.
Twitter’s restructuring also comes at a time when global expenditure has reduced; therefore, advertisers are spending less. Advertisement is a primary revenue source for Twitter, so this will have also played a role in Twitter’s financial situation.
Following Twitter’s layoffs, Facebook announced it would lay off 11,000 employees.
These layoffs were caused by Meta’s rising expenditure over the past 12 months. The cuts represent about 13% of Meta’s workforce and will primarily affect its engineering and sales teams. It is the most significant round of layoffs in Facebook’s history.
Meta has also been under fire for data privacy and business practices. This caused its share price to drop 19% in October.
Since its peak, Meta stock is down 70%. This is likely a result of poor business decisions and reduced advertising spending on the platforms due to less consumer spending. Meta invested a lot of funds into a metaverse project in 2021. This project has seen very little return and may have played a large part in the company’s decline.
One company doing well despite all the negativity surrounding the tech industry is Apple.
Recently, it released its financial figures for the second quarter of 2022. Let’s look at some of the key ones:
- The company reported quarterly earnings per diluted share of $1.52 and a quarterly revenue record of $97.3 billion for the quarter ending in March. This is a year-over-year increase of 9%.
- Apple has reached an all-time high for the number of active devices due to the continued strong demand for goods from customers.
- In Q3, iPhone sales increased by 10% to $42.6 billion. This contributed towards an increase in total revenue of 8% to $90.1 billion for Q3 2022.
- However, compared to Q3 2021, this was a slowdown, as iPhone sales increased by 47% that quarter.
It was a strong quarter for Apple, particularly compared to leading tech firms. There are two main reasons Apple may have outperformed Twitter and Facebook over the recent months:
- It has developed a loyal user base that sees its devices as necessities. Therefore, they are willing to purchase even in times of financial hardship.
- They used good business operating strategies, even while the economy was booming.
What Does This Mean For The Tech Industry?
The tech industry is in a state of flux. Twitter and Facebook are laying off employees, while Apple continues to perform well. What could this mean for the future of the tech industry?
This could mark the end of Silicon Valley as we know it. What hope do other startups have if Facebook and Twitter cannot make money? Tech companies may need to catch up on good business practices. Going forward, they must become savvier or risk being eliminated from the market.
The post-pandemic economy could be more stable. Oil prices, the Russia-Ukraine war, inflation, and many other problems forced these tech giants to make undesirable decisions.
In the year 2020, it seemed tech companies were invincible. Unfortunately, we have seen that this is not the case. Exuberant spending on metaverse projects and employees in unnecessary roles has forced Meta and Twitter to make cutbacks.
As we advance, to be competitive, tech companies will need to continue to restructure and adapt to the economic climate.
Tech companies will also continue innovating with AI. This would effectively cut out many middle managers, leaving engineers and programmers to manage AI.