The apple side of the story
Data privacy has been on Apple’s agenda for some time. In 2010, when the topic did not appear on the covers as often as it does today, the legendary founder Steve Jobs made his position on this topic clear:
“Privacy means that people know what they are applying for, in simple language, over and over again.”
The company focused on IDFA (Identified for Advertisers), a “license plate” for a smartphone, forcing all apps to seek permission from users before using their unique IDs. For more details, check out the latest privacy video on Apple’s Youtube channel below.
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Facebook page story
On the other hand, Facebook has argued that data sharing is necessary because it allows users to have a “better navigation experience”. In addition, a recent study funded by Facebook said the transparency of Apple’s apps is anti-competitive, reduces consumer choice and favors Apple’s own apps.
In addition to caring about the user experience, Facebook also has a business motive to defend. The parent company Instagram and WhatsApp control more than 70% of the social media market share. The latest iOS updates could negatively affect the company’s advertising revenue, especially in the small business vertical.
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Apple is fighting a battle, but be careful
Apple is probably winning the privacy dispute today. In recent years, regulatory agencies have become stricter in data sharing, which favors Apple. Also, the Cupertino company’s revenue depends much less on today’s monetization of user data (see below for an overview of Apple’s revenue in fiscal 2020).
This setting puts Apple in a comfortable position to adopt more rigorous privacy measures. Facebook, on the other hand, is losing more based on user control over data. The company’s business model depends heavily on ad targeting: more than 95% of a company’s revenue comes from advertising.
How could this affect AAPL shares?
A bearish scenario could result in several adverse outcomes. First, any restriction on Facebook apps could reduce the appeal of owning Apple products, as 98% of mobile users have Facebook installed on their devices.
Second, Apple could suffer pressure from Facebook and others because of the Cupertino-based company’s role as a “privacy regulator”. The fight against monopoly with Epic Games is an example of how Apple’s gatekeeper status can be scrutinized, which could be bad for AAPL shares.
Apple has taken the position of “protector of user data and privacy.” Facebook, on the other hand, believes that sharing data is key to ensuring a better user experience. Who do you think is right? Leave your opinion below and follow @AppleMaven on Twitter!
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(Disclaimer: This is not investment advice. The author may have one or more shares listed in this report. The article may also contain affiliate links. These partnerships do not affect editorial content. Thanks to Apple Maven for support)
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