The power of the network: Facebook is turning into an Apple lookalike
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We don’t often think of Apple as a Facebook competitor; that’s a role we reserve for various parts of Google parent Alphabet (especially YouTube), Snapchat, Twitter and various other dedicated social and messaging platforms. Perhaps it’s time, however, to look at Apple and Facebook as companies with broadly similar sources of market power, which would explain their squaring off in the messaging space.
Apple grew extremely fast on the back of its explosive innovations, the iPod, the iPhone and, briefly, the iPad. It reported 68 per cent revenue growth in 2005 (peak iPod) and 66 per cent in 2011 (when Android wasn’t yet the powerful competitor it has since become and Nokia gave up on its own software, getting into an ill-fated partnership with Microsoft).
Perhaps it’s time to look at Apple and Facebook as companies with broadly similar sources of market power.
Now, Apple’s growth is far less impressive; its 2017 revenue was lower than in 2015. Though Chief Executive Officer Tim Cook still touts fast growth of the company’s installed base – it has reached 1.3 billion devices, he said in January, 30 per cent more than two years before – it’s not clear how many of these devices are actually in constant use; the relatively flat iPhone unit sales over the last three years show the user base isn’t growing by much as people mostly replace their old devices.
Facebook’s user base growth is also largely in the past. It has all but stopped in Europe and the US, and it’s barely noticeable overall. Zuckerberg talks about 2 billion daily users for all of the company’s services combined, and that’s likely to plateau. So, another year like 2009, when Facebook’s revenues grew 186 per cent, is extremely unlikely.
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