Instagram tests Reels pause feature as TikTok remains in limbo

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4 hours ago

January 30, 2025

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Meta is testing a long-awaited pause feature on Instagram Reels that will allow users to start and stop videos with just one tap.

The new feature is the latest sign that Meta is looking to capitalize on TikTok’s uncertain future in the U.S. after it briefly went dark earlier this month. The popular short-form video app, which is owned by the Chinese company ByteDance, could be banned for good on April 5 and is still unavailable on the Apple and Google app stores.

The pause feature is currently available to a small group of users around the globe, Meta said. The company was unable to specify when it will roll out more broadly.

Previously, Instagram users have only been able to pause videos on Instagram Reels by tapping and holding on their screen, requiring more work than simply tapping the screen to pause on TikTok. Previously, one tap on Instagram Reels would mute a video’s audio, but the video would continue to play. On Thursday, CNBC was able to pause Instagram Reels videos with a single tap.

Thousands of users have left comments and taken to other social media to lobby for a Reels pause button.

“Hello @instagram, can I please request a pause button on reels?? sincerely, a grieving former TikTok scroller,” one user posted on social media site X while TikTok was offline for a few hours in the U.S. earlier this month.

Besides the Reels pause button, Meta this month has announced a new video editing app called Edits that will compete directly with ByteDance’s CapCut editing app. Edits will launch in February, Instagram chief Adam Mosseri said in a post.

Meta is also paying creators to promote Instagram on TikTok, Snapchat, YouTube Shorts and other short-form video platforms, CNBC reported Sunday.

Shares of Meta are up slightly on Thursday, a day after the company reported fourth-quarter earnings that beat analysts’ estimates on the top and bottom lines.

“We’re going to learn what’s going to happen with TikTok, and regardless of that, I expect Reels on Instagram and Facebook to continue growing,” Meta CEO Mark Zuckerberg said on a call with analysts Wednesday.

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Technology

Samsung profit misses estimates, falls sharply from previous quarter as costs rise

Published

3 hours ago

January 31, 2025

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Samsung profit misses estimates, falls sharply from previous quarter as costs rise

Photo illustration showing the Samsung Group company logo displayed on a smartphone screen.

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Samsung Electronics on Friday reported better-than-expected fourth-quarter revenue, though its operating profit dropped sharply from the previous three months due to higher R&D expenses in its chips segment.

Here are Samsung’s fourth-quarter results compared with LSEG SmartEstimate, which is weighted toward forecasts from analysts who are more consistently accurate:

Revenue: 75.8 trillion Korean won ($52.2 billion) vs. KRW 75.4 trillion
Operating profit: KRW 6.5 trillion vs. KRW 6.8 trillion

Revenue rose about 12% from the same period from last year, while operating profit grew about 130%, year on year. However, operating profit fell nearly 30%, and revenue slipped by over 4%, quarter on quarter, amid soft market conditions and an increase in company expenditures.

Samsung shares fell 2.2% in South Korea on Friday morning.

Fourth-quarter revenue beat Samsung’s own guidance of KRW 75 trillion, while operating profit came in line with the company’s forecast.

Samsung is a leading manufacturer of memory chips, which are utilized in devices such as laptops and servers, and is also the world’s second-largest player in the smartphone market.

“Although fourth quarter revenue and operating profit decreased on a quarter-on-quarter (QoQ) basis, annual revenue reached the second-highest on record, surpassed only in 2022,” Samsung said in its statement.

For the full year, Samsung reported KRW 300.9 trillion in revenue and KRW 32.7 trillion in operating profit. In 2023, the company posted an annual revenue of KRW 258.94 trillion and an operating profit of KRW 6.57 trillion.

For the current quarter, Samsung said that earnings might be limited due to weakness in its semiconductor business but that it would pursue growth through AI smartphones and other premium devices.

“For 2025 as a whole, the Company plans to enhance technological and product advantages in AI, continue to meet future demand for high-value-added products and drive sales growth in premium segments,” it added.

Memory business

Samsung Electronics’ chip business posted an operating profit of KRW 2.9 trillion in the fourth quarter, down over 25% from the three months ending in October, while its annual numbers came in below that of SK Hynix.

This was despite Samsung’s memory business achieving a record-high fourth-quarter revenue of 30.1 trillion helped by demand for its advanced memory products used for AI applications.

“[O]perating profit decreased slightly compared to the previous quarter as a result of increased R&D expenses to secure future technology leadership, as well as the initial ramp-up costs to secure production capacity for cutting-edge nodes,” Samsung said.

Samsung and SK Hynix both provide DRAM, or dynamic random access memory, products — a type of semiconductor memory needed for data processing.

However, SK Hynix has left Samsung behind in HBM, or high bandwidth memory, a type of DRAM, in which chips are vertically stacked to save space and reduce power consumption.

According to Samsung, its memory business is cutting down legacy products to better align with market demand and increasing its proportion of high value-added products, such as HBM.

“In 2025, overall memory market demand is expected to recover from the second quarter,” Samsung said, warning that its earnings are expected to remain weak in the current quarter.

Smartphones

Samsung’s Mobile eXperience and Networks businesses, tasked with developing and selling smartphones, tablets, wearables and other devices, reported a quarter-over-quarter decrease in sales and profit.

Samsung said the performance was in part due to the fading effects of new flagship smartphone model launches.

The segment saw a consolidated revenue of KRW 25.8 trillion and an operating profit of KRW 2.1 trillion in the fourth quarter.

“However, on a full-year basis, flagship sales saw robust growth on the back of double-digit growth of the Galaxy S24 series featuring Galaxy AI, with tablets and wearables also increasing in both value and shipments,” Samsung said.

In the current quarter, Samsung plans to drive sales growth with new flagship models, particularly its newly launched Galaxy S25 series and will continue to push into the AI smartphone market.

Technology

Cook points to ‘fiscal stimulus’ after Apple suffers steepest China sales decline in a year

Published

3 hours ago

January 31, 2025

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Cook points to 'fiscal stimulus' after Apple suffers steepest China sales decline in a year

When Apple reported its December quarter earnings on Thursday, it revealed that China sales had dropped 11.1% on an annual basis.

It was the worst quarter by growth rate since the December quarter a year ago, and marks the sixth straight quarter of declines in Apple’s third-largest region by revenue.

Ahead of Apple earnings, analysts had been fretting about exactly this issue. They cited supply chain checks in the country suggesting weak demand and an overall impression that the Chinese consumer was starting to favor locally made devices from companies such as Huawei and Xiaomi over the iPhone.

China is “the most competitive market in the world,” Cook told analysts on Thursday. In 2024, Apple was third in market share in China, behind Vivo and Huawei, according to an IDC estimate from this week.

When Cook was asked about the company’s performance in China on Thursday by CNBC’s Steve Kovach and analysts on the earnings call, he focused less on the competition and more on how the company’s operations decisions affected China sales.

Cook said there were a few things to keep in mind about the company’s 11.1% decrease in the quarter.

Most notably, Cook cited Apple Intelligence’s absence in China and Chinese affecting sales. He added that the company’s suite of artificial intelligence features for the iPhone 16 had bolstered iPhone sales in the U.S. and other countries where it’s available.

“During the December quarter, we saw that in markets where we had rolled out Apple Intelligence, that the year-over-year performance on the iPhone 16 family was stronger than those markets where we had not rolled out Apple intelligence,” Cook said.

The company’s AI software is only available in English for now, but Apple will release a simplified Chinese version in April, Apple said Thursday. That doesn’t necessarily mean Apple Intelligence will launch in China that month, but it does mean Chinese speakers elsewhere will get to test out Apple’s AI.

“Until we get through the regulatory process, nothing is certain, and we’re going through it now,” Cook told CNBC.

He added that the company is looking for a local partner that is licensed by the country to offer their AI to handle tricky or complicated questions, like OpenAI’s ChatGPT does in the U.S.

“There are a number of Chinese companies that do have licenses to operate locally,” Cook said. “What we have to do is choose one and work with them on the integration, just like OpenAI.”

About half of the China revenue decline was because the company had misread demand in the country, Cook said. That led to a “channel inventory” issue. Apple uses the phrase “channel” to describe companies like wireless carriers and retailers that sell Apple devices.

“My point was that our channel inventory reduced from the beginning of the quarter to the end of the quarter, and that was over half of the reduction in the reported results,” Cook said. “Part of the reason for that is that our sales were a bit higher than we forecasted them to be, toward the end of the quarter.”

Apple ended the quarter “a little leaner” in inventory in the country than the company had expected to, said Cook, who also pointed to a nationwide subsidy program that could effectively reduce the cost of some Apple products in the country.

“There is now a national subsidy program that launched on Jan. 20, on categories that some of our products are a part of. It’s a fiscal stimulus, kind of,” Cook told CNBC.

The Chinese government introduced subsidy policies last year to boost consumption and domestic demand, according to analyst firm Canalys. Smartphones were added to the list of eligible products earlier this month. The subsidy is capped at 500 yuan per product, and models that cost over 6,000 yuan, such as Apple’s Pro phones, aren’t eligible.

On the earnings call Thursday, Cook said that some of Apple’s products including smartphones, tablets, PCs and smartwatches would be covered by the subsidy.

“We do see fiscal stimulus occurring, and we’ll be glad to talk about what that looks like on the next call,” Cook said.

Technology

Apple’s gross margin hits record as services business keeps growing

Published

5 hours ago

January 30, 2025

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Apple's gross margin hits record as services business keeps growing

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Apple is struggling to squeeze growth out of its flagship iPhone unit, but its profit margin keeps going up thanks to a flourishing services business.

In its fiscal first-quarter earnings report on Thursday, Apple reported a gross margin — the profit left after accounting for the cost of goods sold — of 46.9%. That’s the highest on record, surpassing the 46.6% margin the company record in the period ending March 2024.

For Apple, services includes App Store purchases, advertising, payments, AppleCare support and other subscription offerings. The growth in those products has offset a slowdown in sales of the iPhone and a saturation in the global smartphone market.

The “services business in general in aggregate is accretive to the overall company margin,” Apple CFO Kevan Parekh said on the earnings call after the report.

In the current quarter, Apple said its gross margin will be between 46.5% and 47.5%.

IPhone sales slipped almost 1% in the latest quarter from a year earlier, as the company reported weakness in Greater China. Total revenue rose almost 4% to $124.3 billion.

Services revenue rose about 4% to $26.34 billion, beating analysts’ estimates. The business now accounts for roughly 21% of Apple’s overall revenue. Last quarter, Apple announced that its services unit had turned into a $100 billion a year business.

“We were thrilled to bring customers our best-ever lineup of products and services during the holiday season,” CEO Tim Cook said in the press release.

Cook’s emphasis on services has transformed Wall Street’s view of a company that’s been defined over the decades by its iconic devices. For many years in the iPhone era, Apple’s gross margin would predictably come in at between 38% and 39%, reflecting the company’s tight grip over its supply chain and its pricing power in the market.

But with iPhone growth slowing in recent years, Apple’s move into services has changed the equation. The company hit a 40% gross margin in 2021 and has continued to expand it.

Because of Wall Street’s love of profit, Apple’s been able to keep delivering for investors. The stock rose 31% last year, outperforming the Nasdaq, and the company’s market cap has climbed to $3.6 trillion.

“We believe Apple deserves to trade at premiums to its historical comparable valuation, as it sets itself further apart as a provider of premium electronic consumer devices and high-margined digital services, and notably as the age of on-device generative AI gets underway,” analysts at Argus wrote in a report earlier this month. They recommend buying the stock.

Apple shares rose more than 3% in extended trading after Thursday’s report.

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