Apple-Meta (Facebook) rivalry has a chance to become extremely nasty

The global chip shortage and issues with the worldwide supply chain are finally having an impact on Apple according to Bloomberg's Mark Gurman in his weekly Power On letter to subscribers. This past week, Apple reported its fiscal fourth-quarter results and the results for the entire fiscal year. For the quarter, iPhone sales hit $38.87 billion for a 47% year-over-year gain, and for the year handset sales reached $191.97 billion for a 39.33% annual increase.

The company reported revenue of $83.36 billion for the fiscal fourth quarter and while that was a 29% gain year-over-year, it failed to meet Wall Street's expectations. As Gurman correctly points out, Apple would have hit a record $90 billion in quarterly revenue if not for the aforementioned problems. This allowed Apple CEO Tim Cook to state that the shortages weren't the result of anything that Apple had control over.

Cook said that Apple has patched up the problems it was having with its supply chain, but the global chip shortage continues to be an issue. And while Apple's shortfall for the previous quarter amounted to $6 billion, the stakes are higher in the current quarter which includes the holiday shopping season. The executive did say that Apple expects to set a new record for fiscal first-quarter revenue topping last year's $111 billion.

Cook did say to expect the global chip shortage to cost Apple more than $6 billion during the current quarter. As a result, Wall Street has dropped its forecast and the consensus now expects Apple to report $118.5 billion in revenue for the fiscal first quarter of 2022. That is down from the $120 billion that analysts had been looking for, but would still be a record for the firm.

Those purchasing an iPhone are seeing shipping dates pushed back to November while Apple Watch delays show delivery dates going into December.

Gurman also discussed the upcoming mixed reality headset that Apple has reportedly been working on. While many were hoping to see the Augmented Reality (AR) powered Apple Glasses, the tech giant will release its mixed reality headset (AR/VR) first, equipped with cutting-edge chips. The product will compete with Facebook's "Project Cambria" device that it unveiled this past week at Facebook Connect.

Facebook's new mixed reality device will have more power and cost more than the company's current Oculus Quest 2 device. While the latter has a black and white passthrough mode for certain AR features, the new headset will have a color passthrough mode.

So not only will Meta (the new name for Facebook's corporate parent) battle Apple in the mixed reality marketplace, we also passed along a leaked render of a camera-enabled smartwatch that Meta is rumored to release next year. The timepiece bears a resemblance to the Apple Watch but features a front-facing camera at the bottom of the screen. The camera will be able to take photos and videos and transfer them to a phone.

While Apple has its share of rivals like Samsung and Google, the one that is developing with Meta has the chance to be as nasty as these things get. When Apple announced its plans to launch the App Tracking Transparency (ATT) feature Facebook took the new hard. After all, with ATT iPhone users can choose to opt-out of being tracked so that they won't receive targeted ads.

And now that the ATT feature has six months under its belt Facebook continues to criticize it with the same complaint it made months ago; namely, that it negatively impacts small businesses' advertising. Of course, Facebook itself is hurt by the vast majority of iPhone users who have chosen not to be tracked.

Last December, before ATT was released, Facebook ran two full-page newspaper ads attacking it. And Dan Levy, Facebook's Vice President for Ads and Business Products, told the media that "Apple is behaving anti-competitively by using their control of the App Store to benefit their bottom line at the expense of creators and small businesses. Full stop." 

Tim Cook's response at the time? "We believe users should have the choice over the data that is being collected about them and how it's used. Facebook can continue to track users across apps and websites as before, App Tracking Transparency in iOS 14 will just require that they ask for your permission first."

And it was back in 2018 when Apple's CEO, commenting on the news that millions of Facebook users had their personal data sold to Cambridge Analytica, famously stated, "We could make a ton of money if our customer was our product. We’ve elected not to do that."

Facebook vs. Apple. Grab the popcorn and pull up a chair.