Apple's Services Pivot and Privacy Crossroads
Privacy is the new battleground, and Apple knows it. "At Apple, we believe privacy is a fundamental human right," proclaims the company on its Privacy page. "What happens on your iPhone, stays on your iPhone," screamed a new billboard it strategically placed in Las Vegas ahead of the Consumer Electronics Show earlier this January.
As as ad, it sure is effective, and a clever spin on the classic Vegas slogan. But how much of it is actually true? At a time of seemingly never-ending stream of leaks, hacks, and privacy missteps, and as Facebook and Google continue to profit generously off user data through targeted advertising, Apple has smartly built a new strategy centred around privacy.
Of course, Apple collects anonymised data about its users to show ads on its App Store, Apple News and Stocks apps. It also keeps the things you mouth to Siri as anonymised voice files on its servers for a total period of two years for testing and product improvement purposes. But it also bears noting that a lot of data processing occurs locally on the device (aka on-device machine learning) as opposed to being sent over to the cloud.
So there's a very good chance that what happens on your iPhone stays on your iPhone, provided you completely choose to live in an Apple-centric universe, surrounded by its planet of apps and services. An extremely improbable scenario, but even if it were to be true, this "privacy by design" approach has its unintended drawbacks.
Not only will Apple be able to never match up to its rivals in terms of sheer volume of data collected from users, the absence of "user profiles" poses a significant challenge when it comes to developing user-focussed products that run on artificial intelligence and machine learning models. No wonder then Siri's capabilities are stunted, severely lagging behind Google Assistant and Amazon Alexa in the smart voice assistant space.
In fact, in the days leading to the release of iOS 10 almost three years ago, Reuters went on to report that Apple's insistence on "keeping customer data on their devices — rather than in the cloud, on Apple servers — and isolating various types of data so they cannot be united to form profiles of customers," have led to it "grappling with internal conflicts over privacy that could pose challenges to its long-term product strategy."
It's an appreciable stance to take. In the wake of Cambridge Analytica data scandal that shook Facebook early last year, when asked what would Apple do if it were to confront a similar problem, Apple CEO Tim Cook said: "I wouldn't be in this situation," adding, "We can make a ton of money if customers were our product. We have elected not to do that."
Fast forward few months, Cook went on to excoriate advertising giants like Facebook and Google for their data sharing practices with third-parties, stating, "The narrative that some companies will try to get you to believe is: 'I've got to take all of your data to make my service better.' Well, don't believe them," he told VICE News.
Cook reiterated the privacy narrative a couple of weeks later at the International Conference of Data Protection and Privacy Commissioners (ICDPPC) conference held in Brussels, making an impassioned speech calling for an overhaul of digital privacy laws in the U.S., in addition to praising E.U.'s successful implementation of GDPR last year. "It is time for the rest of the world […] to follow your lead. We at Apple are in full support of a comprehensive federal privacy law in the United States," Cook said.
It's one thing to espouse strong privacy laws and act as a privacy regulator for the rest of the tech industry, it's another to conveniently repurpose the message when it happens to stifle competition, not to mention disregard them when it's own business prospects are threatened.
"These stockpiles of personal data serve only to enrich the companies that collect them. This should make us very uncomfortable. It should unsettle us," said Cook in his Brussels speech without directly naming Facebook and Google, but that hasn't stopped Apple from engaging with the companies it disagrees with. Facebook's and Google's apps continue to be available on the App Store, and it gets paid by Google north of US$ 9 billion to keep Google the default search engine in Safari web browser.
But in an interview with Axios late last year, Cook defended the move: "I think their search engine is the best," adding that Apple has added controls in the Safari browser to keep companies like Google from tracking users' browsing history to collect data.
Apple recently punished both Facebook and Google for abusing its internal app distribution mechanism to entice users into side-loading data monitoring apps under the guise of research in return for money and free gift cards, but it also conveniently sidesteps the fact that Apple's iOS had several of Facebook's features built-in natively for at least five years until it eventually pulled the plug on Facebook, Twitter, Flickr and Vimeo integration with iOS 11 two years ago.
While Apple might not be directly responsible for the questionable use of user data by Facebook and Google, the irony is that it facilitates the activity by surreptitiously striking deals with the very companies it's waging privacy wars with, enriching itself substantially in the process. And for a company that has long banged the privacy drum in hopes that it will differentiate it from its data-hungry rivals, it also conveniently ignores the compromises it makes in countries like China and Russia.
Alex Stamos, who departed as Facebook's Chief Security Officer last year to join Stanford University as an Adjunct Professor to teach cybersecurity and cyberwarfare, called out Tim Cook for his hypocrisy in a tweetstorm: "China is an ethical blind spot for many in tech: We ignore the working conditions under which our beautiful devices are made, the censorship and surveillance necessary to ship apps there, the environmental externalities of coal-powered Chinese Bitcoin farms."
"We don't want the media to create an incentive structure that ignores treating Chinese citizens as less-deserving of privacy protections because a CEO is willing to bad-mouth the business model of their primary competitor, who uses advertising to subsidize cheaper devices," Stamos added.
What's more, Apple's decision to remove VPN apps from the App Store in 2017 to comply with Chinese and Russian regulations has proven to be prickly. But when asked about it during the quarterly earnings call, this is what Cook had to say: "We would obviously rather not remove the apps, but like we do in other countries, we follow the law wherever we do business. We strongly believe that participating in markets and bringing benefits to customers is in the best interest of the folks there, and in other countries as well. We believe in engaging with governments, even when we disagree."
The shifting priorities also explains why Apple began outsourcing its Chinese iCloud operations to a state-owned Chinese firm named GCBD in February last year rather than shutting it down. "The thing in China that some people have confused, is certain countries, and China is one of them, has a requirement that data from local citizens has to be kept in China," Cook explained in an exclusive interview with VICE News. "We worked with a Chinese company to provide iCloud, but the keys which is the key, so to speak, pardon the pun, are ours."
That Apple chooses to operate in the country even if it means lesser privacy protections for its customers shows that the company is anything but serious when it comes to user privacy, and that it's a business, like any other, and it would do whatever it takes to grow bigger, especially at a time it is pivoting big time to Services, the vertical that's helped cushion declining iPhone sales by bringing in revenues of US$ 10.9 billion, an all-time high, for the quarter ending December 2018.
The division, which includes App Store, iTunes, Apple Music, iCloud, Apple Pay, AppleCare, along with the money which Google pays Apple to be the default search engine, is on track to become the next big money spinner for Apple, and it shows no signs of slowing down.
The company took to stage at Cupertino yesterday to unveil a trio of subscription bundles for news, games and video, inserting itself as a middleman in an ever-growing number of transactions that it hopes will lock loyal users into its walled garden, at the same time repeatedly emphasising its commitment to privacy.
Earlier this year, Tim Cook wrote an op-ed for Time magazine, calling for a comprehensive federal privacy legislation, giving users the power to "delete their data on demand, freely, easily and online, once and for all." There is no doubt that Apple is comparatively better when it comes to data collection and sharing, but by making privacy the key selling point and projecting itself as a beacon of privacy rights, the message is both strategic and self-serving, one that gives them an competitive edge over Facebook and Google, while handsomely profiting from the surveillance-capitalism atrocities it claims to oppose.
 |
| Apple's Privacy page (Image: Apple) |
As as ad, it sure is effective, and a clever spin on the classic Vegas slogan. But how much of it is actually true? At a time of seemingly never-ending stream of leaks, hacks, and privacy missteps, and as Facebook and Google continue to profit generously off user data through targeted advertising, Apple has smartly built a new strategy centred around privacy.
Of course, Apple collects anonymised data about its users to show ads on its App Store, Apple News and Stocks apps. It also keeps the things you mouth to Siri as anonymised voice files on its servers for a total period of two years for testing and product improvement purposes. But it also bears noting that a lot of data processing occurs locally on the device (aka on-device machine learning) as opposed to being sent over to the cloud.
 |
| Apple's Targeted Advertising Settings on iOS |
So there's a very good chance that what happens on your iPhone stays on your iPhone, provided you completely choose to live in an Apple-centric universe, surrounded by its planet of apps and services. An extremely improbable scenario, but even if it were to be true, this "privacy by design" approach has its unintended drawbacks.
Not only will Apple be able to never match up to its rivals in terms of sheer volume of data collected from users, the absence of "user profiles" poses a significant challenge when it comes to developing user-focussed products that run on artificial intelligence and machine learning models. No wonder then Siri's capabilities are stunted, severely lagging behind Google Assistant and Amazon Alexa in the smart voice assistant space.
In fact, in the days leading to the release of iOS 10 almost three years ago, Reuters went on to report that Apple's insistence on "keeping customer data on their devices — rather than in the cloud, on Apple servers — and isolating various types of data so they cannot be united to form profiles of customers," have led to it "grappling with internal conflicts over privacy that could pose challenges to its long-term product strategy."
It's an appreciable stance to take. In the wake of Cambridge Analytica data scandal that shook Facebook early last year, when asked what would Apple do if it were to confront a similar problem, Apple CEO Tim Cook said: "I wouldn't be in this situation," adding, "We can make a ton of money if customers were our product. We have elected not to do that."
Fast forward few months, Cook went on to excoriate advertising giants like Facebook and Google for their data sharing practices with third-parties, stating, "The narrative that some companies will try to get you to believe is: 'I've got to take all of your data to make my service better.' Well, don't believe them," he told VICE News.
Cook reiterated the privacy narrative a couple of weeks later at the International Conference of Data Protection and Privacy Commissioners (ICDPPC) conference held in Brussels, making an impassioned speech calling for an overhaul of digital privacy laws in the U.S., in addition to praising E.U.'s successful implementation of GDPR last year. "It is time for the rest of the world […] to follow your lead. We at Apple are in full support of a comprehensive federal privacy law in the United States," Cook said.
It's one thing to espouse strong privacy laws and act as a privacy regulator for the rest of the tech industry, it's another to conveniently repurpose the message when it happens to stifle competition, not to mention disregard them when it's own business prospects are threatened.
"These stockpiles of personal data serve only to enrich the companies that collect them. This should make us very uncomfortable. It should unsettle us," said Cook in his Brussels speech without directly naming Facebook and Google, but that hasn't stopped Apple from engaging with the companies it disagrees with. Facebook's and Google's apps continue to be available on the App Store, and it gets paid by Google north of US$ 9 billion to keep Google the default search engine in Safari web browser.
But in an interview with Axios late last year, Cook defended the move: "I think their search engine is the best," adding that Apple has added controls in the Safari browser to keep companies like Google from tracking users' browsing history to collect data.
Apple recently punished both Facebook and Google for abusing its internal app distribution mechanism to entice users into side-loading data monitoring apps under the guise of research in return for money and free gift cards, but it also conveniently sidesteps the fact that Apple's iOS had several of Facebook's features built-in natively for at least five years until it eventually pulled the plug on Facebook, Twitter, Flickr and Vimeo integration with iOS 11 two years ago.
While Apple might not be directly responsible for the questionable use of user data by Facebook and Google, the irony is that it facilitates the activity by surreptitiously striking deals with the very companies it's waging privacy wars with, enriching itself substantially in the process. And for a company that has long banged the privacy drum in hopes that it will differentiate it from its data-hungry rivals, it also conveniently ignores the compromises it makes in countries like China and Russia.
Alex Stamos, who departed as Facebook's Chief Security Officer last year to join Stanford University as an Adjunct Professor to teach cybersecurity and cyberwarfare, called out Tim Cook for his hypocrisy in a tweetstorm: "China is an ethical blind spot for many in tech: We ignore the working conditions under which our beautiful devices are made, the censorship and surveillance necessary to ship apps there, the environmental externalities of coal-powered Chinese Bitcoin farms."
"We don't want the media to create an incentive structure that ignores treating Chinese citizens as less-deserving of privacy protections because a CEO is willing to bad-mouth the business model of their primary competitor, who uses advertising to subsidize cheaper devices," Stamos added.
What's more, Apple's decision to remove VPN apps from the App Store in 2017 to comply with Chinese and Russian regulations has proven to be prickly. But when asked about it during the quarterly earnings call, this is what Cook had to say: "We would obviously rather not remove the apps, but like we do in other countries, we follow the law wherever we do business. We strongly believe that participating in markets and bringing benefits to customers is in the best interest of the folks there, and in other countries as well. We believe in engaging with governments, even when we disagree."
The shifting priorities also explains why Apple began outsourcing its Chinese iCloud operations to a state-owned Chinese firm named GCBD in February last year rather than shutting it down. "The thing in China that some people have confused, is certain countries, and China is one of them, has a requirement that data from local citizens has to be kept in China," Cook explained in an exclusive interview with VICE News. "We worked with a Chinese company to provide iCloud, but the keys which is the key, so to speak, pardon the pun, are ours."
That Apple chooses to operate in the country even if it means lesser privacy protections for its customers shows that the company is anything but serious when it comes to user privacy, and that it's a business, like any other, and it would do whatever it takes to grow bigger, especially at a time it is pivoting big time to Services, the vertical that's helped cushion declining iPhone sales by bringing in revenues of US$ 10.9 billion, an all-time high, for the quarter ending December 2018.
 |
| The new Apple News+ |
The division, which includes App Store, iTunes, Apple Music, iCloud, Apple Pay, AppleCare, along with the money which Google pays Apple to be the default search engine, is on track to become the next big money spinner for Apple, and it shows no signs of slowing down.
The company took to stage at Cupertino yesterday to unveil a trio of subscription bundles for news, games and video, inserting itself as a middleman in an ever-growing number of transactions that it hopes will lock loyal users into its walled garden, at the same time repeatedly emphasising its commitment to privacy.
Earlier this year, Tim Cook wrote an op-ed for Time magazine, calling for a comprehensive federal privacy legislation, giving users the power to "delete their data on demand, freely, easily and online, once and for all." There is no doubt that Apple is comparatively better when it comes to data collection and sharing, but by making privacy the key selling point and projecting itself as a beacon of privacy rights, the message is both strategic and self-serving, one that gives them an competitive edge over Facebook and Google, while handsomely profiting from the surveillance-capitalism atrocities it claims to oppose.
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