Meta Shows Strong Growth as AI Spending Surges

The Meta logo is seen at the Vivatech show in Paris, France, Wednesday, June 14, 2023. (AP)
The Meta logo is seen at the Vivatech show in Paris, France, Wednesday, June 14, 2023. (AP)
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Meta Shows Strong Growth as AI Spending Surges

The Meta logo is seen at the Vivatech show in Paris, France, Wednesday, June 14, 2023. (AP)
The Meta logo is seen at the Vivatech show in Paris, France, Wednesday, June 14, 2023. (AP)

Facebook owner Meta saw net income and revenues top expectations on Wednesday as the company said it would expand investments into artificial intelligence, drawing nervousness from investors.
The social media behemoth, which is also the parent company of Instagram and WhatsApp, said net profit in the third quarter was $15.7 billion -- up 35 percent on the same period last year, AFP said.
Revenues rose 19 percent to $40.6 billion, slightly higher than analyst estimates.
But investors sent Meta shares lower in after hours trading over the outlook for AI spending in the months ahead and another big loss at its virtual and augmented reality arm, Reality Labs.
"Our AI investments continue to require serious infrastructure, and I expect to continue investing significantly there, too," Meta's founder and chief executive Mark Zuckerberg told analysts.
"We haven't decided on a final budget yet, but those are some of the directional trends," he added.
Meta's share price slipped nearly three percent after its earnings results were published.
Like its Big Tech peers, Meta is rushing into artificial intelligence as it tries to build revenue streams away from its social media core business.
In recent months Zuckerberg has put most of his attention and spending on the company's AI innovations that have been rolled out as chatbots across its platforms or used to upgrade its ad tech.
On Wednesday, Meta once again raised its capital investment outlook: for 2024 alone, it is forecasting a range of $38-40 billion, compared with $37-40 billion previously, much of it for AI.
'Rising costs'
Investors "were a little disappointed by the rising costs" said Jasmine Enberg of Emarketer.
"It's going to take longer time to pay off" than some had hoped, she added.
In the first quarter this year, the spending had already caused concern among investors, despite a doubling of earnings.
But a quarter later, Meta's results impressed investors with a further surge in profits, showing that its core ad business could support the investments.
"Meta's solid revenue growth in the quarter will help stave off investor concern about its AI investments," said Debra Aho Williamson of Sonata Insights, who added that these investments were making it easier to post ads on the platforms.
However, she warned, that the full impact of consumer facing AI "won't be felt until 2025 or beyond."
Reactions were positive last month when the company unveiled its Orion augmented reality glasses, which remain experimental but bolstered confidence that Meta will be a leader in the AI wearable space.
Meta also hopes to ride on the excitement of its Ray-Ban Meta smart glasses, which it developed with EssilorLuxottica, the European eyewear giant.
Analysts believe that the glasses could be a hot item during the end-of-year holiday season.
But the recurring losses at Reality Labs, the VR division, continued to weigh on investors minds. The division posted $270 million in revenues in the third quarter -- and $4.4 billion in operating losses.



Apple iPhone 16 Sales Blocked in Indonesia Due to Local Parts Rule

The iPhone 16 Pro is seen at an event at the Steve Jobs Theater on its campus in Cupertino, California, US, September 9, 2024. (Reuters)
The iPhone 16 Pro is seen at an event at the Steve Jobs Theater on its campus in Cupertino, California, US, September 9, 2024. (Reuters)
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Apple iPhone 16 Sales Blocked in Indonesia Due to Local Parts Rule

The iPhone 16 Pro is seen at an event at the Steve Jobs Theater on its campus in Cupertino, California, US, September 9, 2024. (Reuters)
The iPhone 16 Pro is seen at an event at the Steve Jobs Theater on its campus in Cupertino, California, US, September 9, 2024. (Reuters)

Tech giant Apple Inc will not be allowed to sell its iPhone 16 smartphones in Indonesia because they have not met the country's rules on the use of locally made components, the industry ministry said.
Indonesia requires certain smartphones sold domestically to contain at least 40% of parts manufactured locally and the iPhone 16 has not met the requirement, ministry spokesperson Febri Hendri Antoni Arief said in a statement issued on Friday.
"Imported iPhone 16 hardwares cannot be marketed in the country, because Apple Indonesia has not fulfilled its investment commitment to earn a local content certification," he said, adding that the phones can still be brought from abroad for personal use as long as users pay the necessary taxes.
Apple did not immediately respond to a request for comment, Reuters said.
The company's iPhone 16 phones were first released in September.
The top two smartphone makers in the first quarter of 2024 in Indonesia were Chinese firm OPPO and South Korean firm Samsung, research firm IDC said in May.
Indonesia has a huge, tech-savvy population, making the Southeast Asian nation a key target market for tech-related investment.
During a visit by Apple's CEO Tim Cook to Indonesia last April, Indonesia's Industry Minister Agus Gumiwang Kartasasmita said he hoped the tech giant would increase its local content by partnering with domestic firms.
Companies usually increase the domestic requirement through such local partnerships or by sourcing parts domestically.
Apple has no manufacturing facilities in Indonesia, but since 2018 it has been setting up app developer academies, which including the new academy have a total cost of 1.6 trillion rupiah ($101.8 million).