Yahoo Finance Apple’s subtle iPhone move is slowly bleeding its tech rivals
Who needs friends when you're raking in billions of dollars a day?
That must be what tech giant Apple is thinking after it made a seemingly small change to its iPhone operating software that has resulted in some big changes in the world of tech.
The Apple privacy updates, which began rolling out in April, prevent advertisers from tracking iPhone users without their consent. It has had investors in digital ad companies on edge, who fear that reduced access to data will upend the nearly US$100 billion mobile ad market.
Apple's advertising business has surged since it brought in the changes, eating into market share once occupied by Facebook, Instagram and Snap.
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The Financial Times reported this month the revenues of Snap, Facebook, Twitter and YouTube will collectively take an estimated US$13.5 billion hit in the second half of this year due to the iPhone changes.
But criticism is also coming from some unexpected quarters.
Exercise equipment and media company Peloton, which saw investors flock to it when the pandemic hit, said it was also hurting from the iPhone maker's move.
During a call with investors and analysts after releasing its results overnight, the company claimed Apple’s new App Tracking Transparency feature was impacting on its ability to reach new subscribers, likely because Peloton's digital ads used to gain new subscribers had become less effective.
Peloton is blaming Apple’s iOS 14.5 App Tracking Transparency changes on making it more difficult to gain new app subscribers for digital subscriptions, but says subscriptions are slightly higher than internal forcasts.
— Mark Gurman (@markgurman) November 4, 2021
After Snap released its results last month, its share price plunged 25 per cent.
"This has definitely been a frustrating setback for us," Snap chief executive Evan Spiegel said during a conference call with investors.
There can be "no more denying" the ramifications of Apple's privacy push, Ygal Arounian, managing director of internet equity research at Wedbush Securities, said in a research note after Snap's horror results.
Meanwhile Facebook warned the Apple changes caused it to under-report the results of its ads on iOS devices and said the changes had made it more expensive and difficult for brands to advertise on Facebook.
The likes of Twitter and TikTok are also facing headwinds due to the iOS update.
The cunning move has paid dividends for Apple, however, which has tripled the market share of its digital advertising business this year, according to analysis by the Financial Times.
Apple’s ad business has tripled its market share in the six months since it began obstructing Google & Facebook from targeting ads on iPhone, in the name of privacy. (via @PatrickMcGee_) pic.twitter.com/vQrNAAwZxo
— Harry Raymond (@harryraymond) October 29, 2021
– with Reuters
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