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SAN FRANCISCO (AP) — The bloom may be off Apple's iPhone, at least for now. So now the pressure is on the iconic Silicon Valley company to come up with its next big thing.
On Tuesday, Apple acknowledged that it's likely to see an uncharacteristic sales decline this spring, amid signs of global economic weakness and slowing overall demand for new smartphones. That drove Apple shares down more than 6.5 percent Wednesday, extending a months-long slide.
It's almost certainly too soon to expect an Apple Car or even some yet-to-be-named, virtual reality iDevice to turn things around. Apple said it wouldn't comment on its plans beyond what its executives said Tuesday. But among some analysts, hope springs eternal for what the next generation of iPhones — successors to the current 6S and 6S Plus — might bring.
Tech blogs have hinted at a thinner iPhone 7 with dual cameras and wireless earbuds — and minus the familiar headphone jack — to be released this fall. Other reports suggest Apple might also go back to the future with a 4-inch phone — last seen in Apple's 2013 iPhone 5S — as a companion to the next generation of bigger-screen iPhones.
Apple faces "a few tough quarters ahead until we get to the build-up around iPhone 7 later this year," said Daniel Ives of FBR Capital Markets, in a research note Wednesday. He suggested the next iPhones will "turn this ship back into growth waters."
But others warn that even new phones may not be enough to spark the kind of sales frenzy Apple experienced after it launched the iPhone 6 and 6 Plus models with 4.7- and 5.5-inch screens in 2014. "We are not seeing any meaningful upgrades" or significant new features, wrote Rosenblatt Securities analyst Jun Zhang. "It is in our view that iPhone 7 will not sell as well as the iPhone 6."
Apple doesn't have many alternatives for near term growth. Sales of iPads and Mac computers both dipped in the last three months of 2015. In an interview, Chief Financial Officer Luca Maestri said the new Apple Watch had its strongest sales ever in the holiday quarter, but wouldn't provide numbers.
Maestri and other executives say they expect sales of iPads, Macs and Apple Watches to grow in the future. And the company is widely believed to be working on other new products.
While an Apple car isn't expected for several years, CEO Tim Cook may have hinted at another product category Wednesday, when he told analysts he doesn't view virtual reality as a "niche" product.
"It's really cool and has some interesting applications," Cook added, without elaborating. Apple also recently hired virtual reality expert Doug Bowman, a Virginia Tech computer science professor, according to reports last week.
Apple, meanwhile, stressed this week that it's making more money — nearly $5 billion last quarter — from a growing stable of online services, from the App Store to Apple Music and Apple Pay. The message seemed aimed at reassuring investors who worry that Apple relies on the iPhone for two-thirds of its revenue, but several analysts said it was a positive sign.
New products and services may not replace the iPhone as Apple's central revenue source, but they could provide the additional growth that investors want, said analyst Walter Piecyk at BTIG Research.
While the next iPhone could help Apple improve this year's sales figures, he added, "I don't think anyone's expecting the return to hyper-growth that Apple saw in 2015."
SAN FRANCISCO (AP) — Facebook is growing at an exceptional pace as it enters adolescence, propelling it into a better position to challenge Google as the Internet's most powerful company.
Facebook's fourth-quarter report Wednesday provided the latest gauge of the company's impressive strides.
It marked the first time that Facebook's quarterly revenue has surpassed $5 billion — more than fading Internet star Yahoo now generates in an entire year. Facebook's earnings also more than doubled to $1.56 billion, even as the Menlo Park, California, company invests heavily in virtual reality, Internet access in remote parts of the world and a mobile ad network for services other than its own.
The performance lifted Facebook's stock by $6.78, or 7 percent, to $101.23 in extended trading after the report came out.
Although Google remains three times larger by revenue, Facebook has been closing the gap as it sells more mobile advertising on its addictive social-networking app. And it's just beginning to mine revenue from its trendy Instagram service and a rapidly expanding video library.
This spring's debut of the Oculus Rift headset, part of the virtual-reality technology that Facebook bought for $2 billion in 2014, could open another lucrative market. Google is now hiring more virtual reality specialists, a sign that is trying to catch up with Facebook in a still-nascent field that could transform computing.
Social networking remains Facebook's foundation. The service picked up another 46 million users during the final three months of last year to expand its worldwide audience to 1.59 billion users.
Google, now a part of the recently created Alphabet Inc., is thriving, too, with more than 1 billion users on its search engine as well as its YouTube video site and its Android software for mobile devices. That makes it unlikely that Facebook will topple Google anytime soon.
Powered by the world's dominant Internet search engine, Google still sells the most digital advertising by a wide margin. Just how much more will be disclosed Monday, when Alphabet is scheduled to announced its fourth-quarter earnings. Alphabet is expected to report fourth-quarter revenue of nearly $17 billion, after subtracting ad commissions, nearly triple what Facebook generated during the same three-month period.
But consider this: Facebook will be turning 12 years old next week and it just posted revenue of $5.8 billion in its latest quarter. At the same stage of its existence in September 2010, Google's net revenue stood at $5.5 billion.
What's more, Facebook's revenue is climbing at a more rapid clip than Google's was at a comparable stage. Facebook's revenue in the past quarter represented a 52 percent increase from the same time a year ago. When it turned 12 years old, Google's quarterly net revenue rose 25 percent from the previous year.
In another sign of Facebook's progress, its share of the digital advertising market rose from 8 percent in 2014 to 10 percent worldwide last year, according to the research firm eMarketer Inc. Google's share shrank from 32 percent in 2014 to 30 percent last year.
That's still a lot of ground for Facebook to make up, but it's not impossible, given the digital dossiers that it has compiled about its users' passions, friendships and other services that they visit while signed into the social-networking service.
All that data could help Facebook deliver ads tailored for each individual's interests even better than Google has done by analyzing search requests, emails and people's locations, eMarketer analyst Debra Aho Williamson said.
"I wouldn't underestimate Facebook," Williamson said. "They have shaken up multiple types of businesses and completely changed the way that people communicate."
Google knows better than to dismiss the threat posed by Facebook. After all, when it went public in 2004, Google was still smaller than Yahoo. It didn't take long for Google to trounce Yahoo, partly because its rival focused on being on an all-purpose destination while overlooking the lucrative business of search advertising. By contrast, Google has been vigilant about protecting its search business while developing YouTube, Android and other popular products such as Gmail and the Chrome browser.
Investors are betting on both companies. Facebook's stock climbed 34 percent last year, while Alphabet's stock (formerly Google's) surged 47 percent. Meanwhile, the Standard & Poor's index dipped 1 percent.
"Some people have been wondering if Facebook wins, does that mean Google loses?" said Rosenblatt Securities analyst Martin Pyykkonen. "For now, I think both of these stories can win. They are the two big gorillas in digital advertising."
Two major U.S. airlines are offering refunds to passengers worried about the Zika virus outbreak in many tropical countries.
United Airlines says customers booked to fly to areas affected by the virus can reschedule or get refunds. American Airlines says it will give refunds to pregnant women who were planning to travel to parts of Central America.
The U.S. Centers for Disease Control and Prevention have warned pregnant women to take precautions against mosquito bites when traveling to areas in Latin America and the Caribbean where there have been Zika outbreaks. The CDC says the mosquito-borne illness could be linked to a birth defect of the brain.
The United Airlines offer began Tuesday and includes any country covered by a CDC travel notice, an airline spokesman said. American Airlines began refunds Monday for pregnant passengers holding tickets to El Salvador, Honduras, Panama or Guatemala, according to a spokesman.
A spokesman for Delta Air Lines said the carrier was monitoring the situation but not yet offering waivers. JetBlue Airways and Spirit Airlines were not immediately able to say whether they were offering refunds. Southwest Airlines said it was sticking to its normal policy, which lets customers who cancel ahead of time reuse the value of their tickets. All of those airlines fly to at least some affected locations.
On Tuesday, the CDC expanded its travel alert for pregnant women to add the U.S. Virgin Islands and the Dominican Republic to the list of areas with Zika outbreaks. The CDC has already recommended that pregnant women consider postponing trips to 22 other destinations.
— In Central and South America: Bolivia, Brazil, Colombia, Ecuador, El Salvador, French Guiana, Guatemala, Guyana, Honduras, Mexico, Panama, Paraguay, Suriname and Venezuela.
— In the Caribbean: Barbados, Guadeloupe, Haiti, Martinique, St. Martin and Puerto Rico.
— And Cape Verde, off the coast of western Africa, and Samoa in the South Pacific.