SAN FRANCISCO — Two of Silicon Valley's biggest champions drew an emphatic line under the six-week slide in tech stocks Wednesday, and underscored that the future of the entire industry is in mobile technology.
Apple knocked it out of the park with typically solid financial results — although its plan to buy back $30 billion in stock and issue a 7-for-1 stock split signals an overture to please investors amid signs its torrid growth is slackening after a decade.
And Facebook tore it up in after-hours trading after its latest bust-out quarter.
Facebook blew away analyst estimates largely because 1 billion of its members are viewing the social-network via handheld devices, which elevated its mobile ad sales. Nearly 60% of its ad revenue is mobile-related.
Apple, which maintains strong iPhone and iPad sales in the U.S. despite a withering assault from Samsung Electronics, leans heavily on those devices. It reported a profit of $10 billion on the sale of 43 million iPhones, though iPad shipments slipped to 16 million. It is likely to unfurl larger-screen iPhones and new iPad models in the second half of this year, possibly along with an iWatch, to keep its fiscal train rolling.
Though impressive, the results still didn't meet Apple's lofty bar of expectations and could put pressure on CEO Tim Cook to hasten the company's entry into new product categories, such as wearables, which he has strongly hinted at.
Games maker Zynga, the company behind FarmVille, also reported better-than-expected results. It is betting its future on mobile versions of that game and other titles after its desktop business went wobbly. (Its rival, King.com, went public this year on the popularity of its mobile game, Candy Crush Saga.)
We'll have to see how Zynga fares in upcoming quarters. But if the results for Apple and Facebook are any indication, the future looks bright and profitable.
Mobile devices are driving the industry because consumers are spending more time on their smartphones, tablets and wearables — three hours a day vs. two hours and 20 minutes a year ago, according to eMarketer.
More importantly, that is where the revenue is going. Mobile ad spending is expected to vault 75%, to $31.5 billion, this year worldwide, according to eMarketer.
"People are flocking to mobile," says Cathy Boyle, an analyst at eMarketer. "Increasingly, it has become part of their daily routine."
In other words, mobile is the present and the future.