At WWDC 2021 @Apple announced multiple privacy features in iOS15, as it taps into rising consumer concerns around online privacy and online security. In summary Apple has added the following privacy tools:

• Apple has introduced a ‘privacy dashboard’ which provides users with ongoing visibility into the types of data and sensors (e.g. location, photos, camera, contacts, microphone, etc.) that can be accessed by different apps, and how often those apps are doing so.
• Apple is also blocking email pixels, which marketers use to measure email open-rates and other information, including the users’ IP address. This information can be used for targeting users across the internet.
• As part of its premium iCloud+ service Apple has enabled “private relay browsing,” which encrypts Safari internet traffic and routes it such that it is more difficult to track.
• Another new feature added to iCloud+ is called ‘Hide my email’ which creates fake email addresses that can be used to sign up to email newsletters and websites. This allows users to keep their personal email address private by using Apple’s email relay service.

The implications of these new features vary across different parties, with publishers, advertisers and marketers the losers.

Consumers: In March 2021 we conducted a high-level survey of 100 smartphone users in the US to understand the extent to which consumer concerns about online privacy and security have grown over the last year, and consumer willingness to pay for apps that protected both user privacy and security. We found that 6 in 10 US respondents had stated that their attitude and concern toward online privacy and security has increased over the past 12 months. Also, 40% indicated a willingness to pay a premium for online privacy facilitated by secure Wi-Fi connections and alerts when personal details are accessed. Therefore, consumers that are increasingly concerned by data sharing have the ability to remain opt out of app tracking (via App Tracking Transparency), introduced in iOS14.5. With iOS15 they can now see which apps are accessing different types of data and device sensors, can block email tracking, shield their personal email addresses from third-parties and browse with greater levels of privacy.

Advertisers and marketers: Advertisers and marketers will lose access to identifiers which allow them to target important user segments, and to calculate campaign linked ROI. With less visibility and lower confidence in which user segments their campaigns are reaching, the value of the media (whether in-app or via email) for advertisers and marketers will be reduced. While Strategy Analytics expects total spend on digital and mobile advertising will continue to grow by 9% and 13% in 2021, respectively, brands will concentrate their spending to wall gardens like Amazon, Facebook and Google, which have large bases of signed in users.       

Publishers: app publishers that generate revenue through advertising will see the value of impressions, and therefore revenue, from iOS customers decline, as users remain opted of app tracking. Reliance on advertising revenue varies across companies. For example, advertising accounts for 18.5% of Zynga’s mobile game revenue in 1Q 2021, and around 14% of Rovio’s 2019 revenue. Apple’s focus on privacy will negatively impact a significant component of these mobile game business, and even more so on other companies that rely more on in-app ad revenue from iOS users. These ad-dominant companies should be thinking about a shift in business model, toward freemium, transactions and subscriptions to survive in the Apple ecosystem.  

Other device makers: This move by Apple further differentiates it from competitors and raises some other important questions. Will Google move to implement similar privacy tools in Android? Will any of the many Android OEMs look to differentiate on privacy and security by adding similar features, and which OEM is best positioned in consumers' minds as the guardians of user security and privacy? 

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