JAKARTA - Apple's recent privacy changes to its iPhone products are a sign that the Cupertino-based tech giant may be looking to enter the internet advertising market. So far that market is dominated by Facebook and Google, said an analyst at RBC Capital Markets.
Since the April software update, most iPhones have allowed users to decide which apps can track user activity as well as critical information that helps companies like Facebook serve customized ads to users and measure their impact.
The feature, which Apple calls Application Tracking Transparency (ATT), has alarmed many digital advertising and mobile game companies, including Facebook, which says it has made it more expensive and difficult for brands to advertise on its platforms.
"We see (the privacy change) as a sign that Apple may want to compete in global advertising," RBC analyst Brad Erickson said in a client note Thursday Sept. 30, as he started coverage of Facebook, Amazon and Alphabet with "outperform" ratings.
Erickson is given a four-star rating for the accuracy of his earnings forecasts at the company and internet recommendations, according to Refinitiv data.
"(Apple) can use data privacy as a safeguard when investing in behind-the-scenes search algorithms," Erickson said, referring to the potential ad revenue from search engines like Google.
"If advertisers "have no choice but to be blindsided by the loss of signal from Apple," Google's YouTube and Amazon's Connected TV could benefit as advertisers' next best alternatives, Erickson said, as quoted by Reuters.
Evercore ISI analysts also pointed to Apple's possible advertising ambitions in August, and said it was "blocking third-party advertising" to give advertising a successful start. However, they note that ATT is meant for user privacy rather than monetization. Apple, Facebook and Alphabet did not immediately respond to requests for comment from Reuters.
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