Is Apple Inc. the big bad monster after its new iOS 14.5 update? Or are they the good guys? With a new iOS privacy change, Facebook and other apps can take a significant financial hit. Consumers now have the option upon entering an app to safeguard their information from app developers looking to learn their specific online behaviors for future personalized ads. As Facebook CEO Mark Zuckerberg states that Apple is one of their biggest competitors, this iOS 14.5 privacy update is a huge blow that not only can negatively affect Facebook’s revenue stream but that of other major apps and small businesses abroad as well.
- Free apps may now charge consumers to use them - Apple will make a commission from those apps sold through their Apple app store.
- Facebook will show an educational screen before presenting Apple’s prompt
- Facebook says that people rather see personalized ads than random ones
- Personalized ads support small businesses with smaller ad budgets
- Personalized data keep apps free
- People will appreciate Apple more
Both Apple and Facebook have a point when it comes to prompting users to safeguard their app-activity information from interested apps.
Free apps may now charge consumers to use them - Apple will make a commission from those apps sold through the Apple app store
With this new iOS update, Apple should surely benefit. Personalized ads were a key profit builder for apps, allowing them to offer free apps to consumers in exchange for information pertaining to actions taken on their apps. These apps would sell this information to third parties and get a check as a result. With over 113 million iPhone users in the United States, nearly 47% of all iPhone users, apps were making it big. With this new privacy prompt, apps can take a substantial loss in such regard, which can motivate them to start charging to use their apps.
The bright side of this all is with Apple. Now that businesses are likely to charge for their apps, Apple can look forward to earning more commission in their app store. Investors of Apple are promised returns, and Apple surely knows how to play to win their market.
Facebook will show an educational screen before presenting Apple’s prompt
To help people make a well-informed decision on how their information will be used through Facebook, they will show an educational screen before presenting the Apple prompt. This way, Facebook can provide more details on how they will use data for personalized ads. Facebook has suggested that Apple’s prompt may be a little misleading. It discourages people from giving their permission and doesn’t give enough information explaining what their decisions get them. Apple is giving off the impression that its users are trading away their privacy for personalized ads. Facebook wants to ensure that users understand what information is being used and how it is being used.
Facebook says that people rather see personalized ads than random ones
In a study conducted in December of 2020 by ignitepost, consumers would rather have targeted ads versus random. The statistics revealed an advantage of 56.7% compared to 43.3%. In another article back in May 2013, the same result of target ads over random ads surfaced, but this time by Mediapost.com. The article stated that 40.5% of people would rather get targeted ads, while 27.6% wanted both, and 16.1% referred random ads — 15.8% constituted another statistic. The significance is that Facebook has a point when it comes to people wanting to see personalized ads than random ones. And because of so, educating users on the details of personalized ads can allow Facebook to continue to provide what people want versus them being misled. Users can lose out of the privilege of discovering new opportunities to take advantage of pertaining to their economic interests.
Personalized ads support small businesses with smaller ad budgets
The plan by free apps to not only profit as an app but to get consumers ads that best benefits them and to provide smaller businesses an opportunity to make more money has been shot down by Apple. Apple is in the top three most successful companies in the world, according to Statista, behind Saudi Aramco and Microsoft. So, surely, the advertising budget isn’t a concern for them, neither for their partners - AT&T, Verizon Communications, Intel, and many others. However, what about the little guys? Those small businesses with a small advertising budget looking to impact their markets of business, what about them?
Yes, there is more than one way to reach targeted consumers, but with this new iOS 14.5 update, it will have to be done with respect to iOS users’ privacy choice. With 97.9 percent of Facebook’s revenue coming from ads - $84.2 billion in ad revenue in 2020 - surely, if businesses aren’t converting ads, they’ll likely refrain from Facebook advertisements and take their business elsewhere.
Personalized data keep apps free
If apps didn’t have a way to make money with their projects, why, in various cases, are they spinning millions of dollars to make them? An article through thenextweb.com explains how free apps make millions of dollars, revealing three reasons - through ads, premium services, and in-app purchases. The global in-app advertising market in 2019 was $78 billion and is predicted to only grow from that point on to 2020. But with this new Apple iOS update, where do we expect the in-app advertising market to go?
We can hope that apps apply Facebook’s method of including an educational screen before Apple’s privacy prompt. Maybe an incentive can help. Offering users discounts and cash towards their favorite products and services, if apps allow them to continue personalized ad operations, may not be a bad idea. Whatever has possibility to keep the personalized advertsiing boat afloat should be considered.
People will appreciate Apple more
Now that iOS users are receiving a prompt regarding privacy settings; they will love Apple even more. An appreciative acknowledgment of user’s privacy can heighten the iOS experience. The feeling of knowing that your activity on your iOS device is strictly confidential from apps can bring a sense of confidence knowing that people aren’t watching your iOS activity on a daily basis - creepy!
How do I know if my iOS device is updated?
- Go to the Settings app
- Tap on “General”
- Tap on “Software Update”
- Tap “Customize Automatic Updates” or “Automatic Updates”
All iPhone updates will download and install according to user settings.
How exactly does the new iOS prompt work?
It’s simple. Apple asks the iOS user if they’d like for a subjected App to track their activity. You can select to allow or not allow. Here are two examples of what to expect with the iOS 14.5 privacy update:
Other updates to the OS 14.5
My Apple device, Apple investments, and Facebook investments
My apple device
As a user of iOS, what has changed? It is always great to understand your options as a customer. This new update can give customers control over their privacy and make them feel a lot freer to explore the web without a business monitoring their activity.
As an Apple investor, this is a massive leap for the business. It has always been a safe investment as its stocks ten years ago at 11.09 is up +1,103% today. This iOS update is another move that will keep Apple further advanced at the winning table, especially if apps are now having to charge consumers for usage and Apple is earning a commission in their app store as a result. They’ve grossed over $64 billion from their app store alone in 2020. Just imagine the gross figure when more apps are having to charge iOS users.
With 97.9% of Facebook’s revenue being that of ads, this privacy prompt potentially can put a decline in their revenue in a major way. As of January reports through wersm.com, Facebook’s fourth-quarter growth has slowed. But user fatigue and growing competition were the causes. In another article at frontiersin.org on July 2021, Facebook users between the age of 12-34 rapidly declined over the past two years by 20%, claiming that “Facebook is no longer the go-to social media for personal and social uses.” Apple’s new iOS update doesn’t make life any easier for Facebook.
So, is Apple a monster? When it comes to conducting their business, they know how to profit and appreciate their customers despite the collateral damage. As it is revealed that Facebook is pretty much on a decline anyways, it appears as though Apple is just helping the company get to the exit much faster. However, Facebook will fight, and certainly, they have a master plan to overcome this Apple iOS privacy update. Besides, Facebook shouldn’t be worried as they are the owners of WhatsApp, Messenger, Oculus, and Instagram. Instagram is worth over $100 billion alone.