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It’s interesting that Apple is taking steps that are tough on Ad networks and tracking. From Apples perspective, why are they waging this war? Sure, user expe

It’s interesting that Apple is taking steps that are tough on Ad networks and tracking. From Apples perspective, why are they waging this war? Sure, user experience in the Apple ecosystem is improved, but there has to be more to the story. At first, I thought it was a long-game strategy of chipping away at Google + Facebook while developing a walled-off user base that only Apple (and their affiliates/partners) can monetize. But there has to be something more substantial. Assuming it costs $X to develop these adtech walls, Apple must require $Y in return... where is this $Y going to come from?

summerlight 6y ago
It's simple; Apple is aggressively expanding into service business space where many of it doesn't really make sense to make direct revenue while they're largely a underdog. Given that developing those services on par to FB/Google/Amazon's needs at least tens of billions of dollars, they cannot really build a sustainable business without generating actual revenue. And no one has developed a business model applicable to billion user bases for those "free" services other than advertising. Of course, while it's possible that Apple can keep themselves away from those "free" services but it means that they also need to give up a part of their control on customer relationship. Since it is the core part of their long term strategy, I don't think they can easily give it up. I think they will eventually foray into the advertising business rather than giving up user control. Here, the only major advantage of their services is platform control. The major disadvantage is their perception of privacy-friendly company, so their options on ad network level optimization are significantly limited. The only relevant ads service from Apple is app search ads because this is the only area they can get user information without privacy troubles; this clearly demonstrates their strong and weak points. The only logical conclusion that can be derived from this situation is utilizing their platform control to "level the playground"; even if Apple cannot use the same user data, they can force others to give up. This will neutralize Apple's disadvantage while retaining their platform advantages, which likely give them some time to catch up their competitors in service businesses as well.
bthrn 6y ago
Apple has usually billed itself as a high quality hardware manufacturer, and more recently they've expanded into services. The lion's share of their revenue is from these two things. Privacy has always been a core tenet of Apple's value proposition. They ask for more money, and in return you get assurance that the system you're using values your privacy more than other ecosystems. I don't necessarily think there needs to be anything more to it than that. Apple knows it can win privacy conscious people and monetize them in ways Google can't, and that's what it does.

summerlight 6y ago

It's simple; Apple is aggressively expanding into service business space where many of it doesn't really make sense to make direct revenue while they're largely a underdog. Given that developing those services on par to FB/Google/Amazon's needs at least tens of billions of dollars, they cannot really build a sustainable business without generating actual revenue. And no one has developed a business model applicable to billion user bases for those "free" services other than advertising. Of course, while it's possible that Apple can keep themselves away from those "free" services but it means that they also need to give up a part of their control on customer relationship. Since it is the core part of their long term strategy, I don't think they can easily give it up. I think they will eventually foray into the advertising business rather than giving up user control. Here, the only major advantage of their services is platform control. The major disadvantage is their perception of privacy-friendly company, so their options on ad network level optimization are significantly limited. The only relevant ads service from Apple is app search ads because this is the only area they can get user information without privacy troubles; this clearly demonstrates their strong and weak points. The only logical conclusion that can be derived from this situation is utilizing their platform control to "level the playground"; even if Apple cannot use the same user data, they can force others to give up. This will neutralize Apple's disadvantage while retaining their platform advantages, which likely give them some time to catch up their competitors in service businesses as well.

bthrn 6y ago

Apple has usually billed itself as a high quality hardware manufacturer, and more recently they've expanded into services. The lion's share of their revenue is from these two things. Privacy has always been a core tenet of Apple's value proposition. They ask for more money, and in return you get assurance that the system you're using values your privacy more than other ecosystems. I don't necessarily think there needs to be anything more to it than that. Apple knows it can win privacy conscious people and monetize them in ways Google can't, and that's what it does.