Apple unveiled new privacy features aimed at distancing itself from Facebook and Google as the smartphone giant comes under increased regulatory scrutiny and searches for new ways to offset slowing iPhone sales.
Chief executive Tim Cook told more than 5,000 people at Apple Inc.’s annual developers’ conference in San Jose, Calif., that the company was launching a feature called “Sign in With Apple” that lets users login to third-party apps without having to enter a username and password.
The announcement takes aim at Facebook Inc. and Alphabet Inc.’s Google, which have long offered developers the popular option of allowing customers to login directly to third-party apps using their social-media accounts.
That “can be convenient, but it can also come at the cost of your privacy,” Mr. Cook said, adding it can allow apps to collect data and track users.
Apple said its sign-in technology would use facial-recognition software and would give users the ability to restrict which personal details they shared with apps, such as their e-mail address. Mr. Cook said Apple would also make it harder for apps to track the location of a user through their iPhone.
Apple has long used its data-privacy practices to distinguish itself from scandal-plagued social-media giants. Mr. Cook has publicly sparred with Facebook chief executive Mark Zuckerberg over the social-media giant’s data-privacy scandals.
But developers increasingly have complained that Apple uses its privacy protections to assert dominance over its App Store. Apple charges third-party developers such as the music-streaming service Spotify a 30-per-cent cut of subscription sales, a fee that doesn’t apply to its own, competing services.
This time last year, Mr. Cook announced a slew of new privacy controls, including an option for parents to remotely control how their children used their iPhones.
Since then, nearly a dozen companies offering third-party parental control software for the iPhone have complained that they were kicked off the App Store. Apple has said the third-party apps violated its privacy rules and wanted access to too much data about children’s phones.
Those complaints have drawn the attention of global competition regulators and illustrate the fine line Apple must walk between respecting user privacy, promoting its own services and allowing competition in its app market.
Reports emerged Monday that the U.S. Justice Department would take control of a potential Apple antitrust probe into the company’s control over app distribution, as part of a broader review by the Federal Trade Commission, the consumer watchdog, of the anti-competitive practices of tech firms. The news was “a near-term gut punch for tech investors,” analyst Dan Ives of Wedbush Securities said. It pushed Apple’s stock down 1 per cent Monday.
Earlier this year, Spotify complained to European Union regulators that Apple was using the App Store to favour its own Apple Music service. Last month, the U.S. Supreme Court gave the green light to an antitrust class-action lawsuit by consumers who say the smartphone giant’s total control over app distribution across its devices has allowed it to raise prices on apps.
Any move to restrict Apple’s ability to charge hefty fees to developers to distribute apps to their 1.4 billion iPhone users could backfire, by prompting Apple to stop creating new tools for developers, analyst Horace Dediu of Asymco said. “It can go wrong easily. If you try to crack down on this, it won’t necessarily end well for the developer,” he said.
Apple offered developers new tools on Monday that could help mend some fences, including the ability to run third-party apps on its CarPlay interface system for vehicles and Apple Pencil, an electronic stylus. It also said it would make it easier for developers to build apps across different Apple devices, using fewer lines of code. But it also launched new health features, such as a menstrual-cycle tracker, that put the company in direct competition with popular period-tracking apps such as Flo.
Company executives spent much of their time showing off a new high-end desktop computer, a powerful new version of its Mac Pro for filmmakers, graphic artists and musicians, with prices starting at US$6,000. It also unveiled a $4,000 display monitor. Apple isn’t likely to sell large numbers of the new computer, but the announcement is “establishing Apple again as having a high-end computer, which is something they’ve lacked for a long time,” Mr. Dediu said.
Apple also said it would replace iTunes with three stand-alone apps for podcasts, music and television. The company also unveiled a new operating system for its iPad. The changes come as Apple announced a bigger push into services, such as original streaming television, video game and news subscriptions that can help it offset slowing iPhone sales.
Research firm IDC estimated that iPhone sales were down 30 per cent in the first quarter of 2019 from the same period last year, pushing revenue down an annualized 5 per cent.
At the same time, Apple said revenue from services hit a record US$11.5-billion in the quarter. Apple dominates the global app market thanks to legions of iPhone users who are willing to spend money on premium services for the phone. While roughly three-quarters of the world’s smartphones run Google’s Android operating system, Apple’s App Store takes in twice the revenue of Android’s Google Play, according to Sensor Tower, a mobile market research firm. Apple has said it now has more than 20 million developers who have earned more than US$100-billion creating apps for Apple devices.
The Globe and Mail, June 3, 2019