Linked List: July 28, 2022

Thursday, 28 July 2022

Apple Q3 2022 Results 

Jason Snell, Six Colors:

Apple’s fiscal results are out. The company generated $83B in revenue. Compared to the year-ago quarter, Mac sales were down 10%, iPad sales down 2%, iPhone up 3%, Services up 13%, and Wearables down 8%.

As usual, Snell has plenty of charts to visualize the data, and a transcript of the analyst call. Apple’s statement of operations (the numbers) is here.

At a glance it looks bad that Mac revenue is down 10 percent year-over-year. M2 MacBook Airs didn’t go on sale until July, which is Q4, but I don’t think that’s relevant to this dip. (Most M2 MacBook Air configurations are backordered about two weeks, but I think that’s because of supply chain bottlenecks, not unexpectedly high demand.) The dip is because so many businesses and consumers bought new laptops during the pandemic because they needed them for work-from-home and school-from-home. The big tell on that for Apple is the monster quarter the Mac had back in the July–September quarter in 2020. That was the quarter before Apple unveiled the first M1 Macs (including the bestselling MacBook Air), but after Apple told the world that they’d be shifting the entire Mac platform to its own silicon by the end of the year.

I realize a lot of normal people would have bought MacBooks in that quarter of 2020 even if COVID hadn’t happened, because they’re not nerds and didn’t know or care about Apple silicon vs. Intel, but that quarter was record-breaking for Mac sales. Sales weren’t just up year-over-year, they were up 29 percent!

Instagram Walks Back Recent Changes (But the Whole Thing Is Still Going to Shit, Don’t Worry) 

If you haven’t been paying attention to Instagram lately, they’ve been steadily dialing up the algorithmic content users see in their feeds, especially video. More stuff in your feed from accounts you don’t follow, selected by machine learning algorithms, at the expense of stuff from people and brands you have chosen to follow. To top it off, they recently rolled out a limited test to a small — but not that small — number of users that turned those users’ timelines into something basically like TikTok: full-screen videos (and some images) that you go through one at a time. This did not go over well.

They are listening though, and they’re rolling back some of those changes for everyone and, for now, cancelling the TikTok-style timeline test. This news was announced by Instagram chief Adam Mosseri today in a deft interview by Casey Newton at Platformer:

But Instagram will temporarily reduce the amount of recommended posts and accounts as it works to improve its personalization tools. (Mosseri wouldn’t say by how much, exactly.)

“When you discover something in your feed that you didn’t follow before, there should be a high bar — it should just be great,” Mosseri said. “You should be delighted to see it. And I don’t think that’s happening enough right now. So I think we need to take a step back, in terms of the percentage of feed that are recommendations, get better at ranking and recommendations, and then — if and when we do — we can start to grow again.” (“I’m confident we will,” he added.)

Mosseri made clear that the retreat Instagram announced today is not permanent. Threats to the company’s dominance continue to mount: TikTok is the most downloaded app in the world, the most popular website, and the most watched video company. Meanwhile, Apple’s App Tracking Transparency feature has blown a $10 billion hole in Meta’s core advertising business, and on Wednesday Meta reported its first-ever quarterly revenue decline. Zuckerberg has assumed a war footing, and promised that many more changes are on the way.

It goes without saying that Instagram has no plans to allow users to turn off recommendations. Instagram users will be getting “recommended” content whether they want to see any of it or not, they’re just going to try to do a better job with it.

Users serve Instagram, not the other way around.