Friday, 14 May 2021 08:29

Apple looking at US$60b windfall through new privacy campaign: claim Featured

Apple looking at US$60b windfall through new privacy campaign: claim Image by PublicDomainPictures from Pixabay

Apple has opened up a possible new revenue stream that could be as much as US$60 billion (A$77.6 billion) through its new privacy narrative, a main part of which is its ad-tracking technology that in the iOS 14.5 update, technology analyst outfit Counterpoint Research claims.

Research director Neil Shah said in a blog post that advertising was the peak business model and every technology firm was trying to get into the game. "User data is the key to understanding and retaining users, improving and cross-selling offerings, and serving targeted ads," he wrote.

"Alphabet (Google), Facebook, Tencent, Microsoft, Amazon and Apple all see great value in advertising as a top-line and bottom-line driver. The fight for eyeballs or clicks is fiercer than ever."

Apple introduced features in the 14.5 update which allow users to opt out of allowing apps to track them across websites, a major avenue for companies like Facebook to collect comprehensive datasets on users.

As iTWire reported, this change appears to have had a big effect, with an 87% opt-out rate witnessed over the first fortnight after the changes were released.

Shah said Microsoft and Amazon were monetising data indirectly via cloud, training AI engines and servicing ads within their platforms (like Bing/Windows and Amazon Marketplace), while Alibaba (commerce), Tencent (communication) and Baidu (search) had full control over the billion-user China market.

Aspiring players such as Uber, Xiaomi and Jio Platforms also aimed to leverage user data of hundreds of millions of users to boost their top-line by cross-selling or serving ads.

Shah pointed out that Apple now had close to a billion iPhone users and until now both Google and Facebook had been able to count on advertising revenue from monetising these users' data. But that free ride had come to an end.

"...Apple over a couple of years has been building a strong 'privacy-centric' narrative in a bid to protect the user data from these third-party ad platforms or applications such as Facebook," Shah said.

"As a first step, Apple killed Identifier for Advertisers last year with its iOS 14, crippling the advertisers in tracking users. In its next move, Apple rolled out the App Tracking Transparency privacy policy with the recent iOS 14.5 update, limiting third-party mobile ad platforms’ ability to track and collect user data by demanding an opt-in from the user to allow tracking."

Alongside these initiatives, Apple had stepped up its own advertising platform to gain full control over its user base and the opportunity for monetisation.

"This is a clever move by Apple to expand its monetisation opportunity which is significant. Apple is not leaving money on the table," Shah claimed.

"While the third-party ad platforms might see this power move as unfair and anti-competitive, Apple has leverage here along with a very compelling privacy narrative to convince its user base and the industry that it is a 'more trustworthy and less evil option' compared to Facebook, Google or other ad platforms."

Due to this, he said, the next ads visible on the iOS platform were more likely to be pushed by Apple, based on the data, now mostly exclusive, that it was collected from iOS devices.

Given that iOS users are generally the wealthier tier of the market, Shah said marketers would be willing to pay high prices for access to this user base.

"This will further boost its overall ad revenues. Apple already has growing revenues from its App store and browser search," Shah noted.

"This can even surpass App Store revenues in the next few years, in addition to the other growing revenue opportunities Apple can capitalise on.

"It would be a bold move if Apple offers a more transparent 'opt-in' to its users for its own advertising platform as well, to remain fair and true to its privacy stance."

However he said there was a downside in that other ecosystems could adopt a similar model to keep out third-party platforms.

"Google still controls the lion’s share of ad revenues via its platform and also has a side-deal with Apple, paying the Cupertino giant billions of dollars in return for search ad revenues from the Apple platform," Shah said.

"If Google takes a leaf out of Apple’s playbook here, it would be more than happy to keep all the ad revenues generated from Android for itself. Google has already been tightening up privacy and ad personalisation, and moving towards taking more control of the advertising on its platform.

"This could be the death knell for the likes of Facebook and other platforms, kick-starting a duopoly."

While not at anything like the same scale, Shah said it would be interesting to see how fast the Huawei ecosystem built around Harmony OS, Huawei Mobile Services and 1+8+N strategy could grow "and, if at all, provide some opportunity for other third-party ad platforms, or keep [the revenue gains] for itself like Apple".

He said the same trend, if it held, could extend to other market segments where advertising could really thrive, like XR, PCs or autonomous vehicles.

"Fortunately for Facebook, it has cornered almost half of the XR landscape with its Oculus portfolio. But with Apple’s entry, the dynamics could shift swiftly," he cautioned.

Read 2414 times

Please join our community here and become a VIP.

Subscribe to ITWIRE UPDATE Newsletter here
JOIN our iTWireTV our YouTube Community here


Hybrid cloud promises to bring together the best of both worlds enabling businesses to combine the scalability and cost-effectiveness of the cloud with the performance and control that you can get from your on-premise infrastructure.

Reducing WAN latency is one of the biggest issues with hybrid cloud performance. Taking advantage of compression and data deduplication can reduce your network latency.

Research firm, Markets and Markets, predicted that the hybrid cloud market size is expected to grow from US$38.27 billion in 2017 to US$97.64 billion by 2023.

Colocation facilities provide many of the benefits of having your servers in the cloud while still maintaining physical control of your systems.

Cloud adjacency provided by colocation facilities can enable you to leverage their low latency high bandwidth connections to the cloud as well as providing a solid connection back to your on-premises corporate network.

Download this white paper to find out what you need to know about enabling the hybrid cloud in your organisation.



It's all about Webinars.

Marketing budgets are now focused on Webinars combined with Lead Generation.

If you wish to promote a Webinar we recommend at least a 3 to 4 week campaign prior to your event.

The iTWire campaign will include extensive adverts on our News Site and prominent Newsletter promotion and Promotional News & Editorial. Plus a video interview of the key speaker on iTWire TV which will be used in Promotional Posts on the iTWire Home Page.

Now we are coming out of Lockdown iTWire will be focussed to assisting with your webinars and campaigns and assistance via part payments and extended terms, a Webinar Business Booster Pack and other supportive programs. We can also create your adverts and written content plus coordinate your video interview.

We look forward to discussing your campaign goals with you. Please click the button below.


Sam Varghese

Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

Share News tips for the iTWire Journalists? Your tip will be anonymous




Guest Opinion

Guest Reviews

Guest Research

Guest Research & Case Studies

Channel News