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<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "The shot was clear Facebook (NASDAQ: FB) and Alphabetof (NASDAQ: GOOG) (NASDAQ: GOOGL) Google, which uses single sign-on systems to connect applications to their data collection ecosystems. Apple said its system would only collect a minimum of data and & nbsp; block access to users' real email addresses. "Data-reactid =" 12 "> This decision was obvious. Facebook (NASDAQ: FB) and Alphabetof (NASDAQ: GOOG) (NASDAQ: GOOGL) Google, which uses single sign-on systems to connect applications to their data collection ecosystems. Apple said its system would only collect a minimum amount of data and block access to users' real email addresses.
Apple CEO Tim Cook. Source of the image: Apple.
How could this hurt Facebook and Google
Facebook and Google generate most of their income through online ads. Advertisers flock to both platforms because their ads can easily target specific demographic data of users.
Facebook collects this data based on user location, social links and other interactions. Google does the same by recording online searches of a user, visited places and other data. Both companies expanded their ecosystems several years ago with unique signatures for third-party services, as well as for third-party sites and applications.
This movement simplifies the connection for users, who no longer have to manage separate login credentials and passwords across multiple sites and applications. However, it also allowed Facebook and Google to collect more data from third-party apps and sites, which allowed them to design better-targeted ads.
<p class = "canvas-atom-canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "This expanding network of applications and sites has boosted Facebook and Google's dominant dominance in the online advertising market: both companies now control nearly 60% of the US digital advertising market, according to eMarketer.nearest competitor is Amazon, which is expected to occupy 9% of the market this year, according to estimates of the company. "data-reactid =" 38 "> This expanding network of apps and sites has boosted the dominance of Facebook and Google in the online advertising market, with the two companies now controlling nearly 60%, according to eMarketer , the US digital advertising market is their main competitor. Amazon, which is expected to represent 9% of the market this year.
Apple, according to IDC, controls 14% of the global smartphone market. According to Counterpoint Research, it also controls nearly half of the US smartphone market. By the time Apple deploys its mandatory single sign-on system, it could break Facebook and Google's links with many iOS users.
A woman uses an iPhone XS.
Source of the image: Apple.
But Apple probably has ulterior motives
Apple is promoting its SSO system as a way to free iOS users from Facebook and Google, but it probably has other motivations. While Apple hardware sales are slowing, Apple is increasingly supporting the growth of its service ecosystem – which generated 20% of its revenue the previous quarter – to take over and lock users.
<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Apple may not collect user data for create craft ads, but he can still use this data to evaluate consumer tastes and optimize his subscription services just like Netflix& nbsp; analyzes viewer data to create new programs. "data-reactid =" 68 "> Apple may not be collecting user data to create ads, but it can still use them to evaluate consumer tastes and optimize its subscription services. Netflix Analyze audience data to create new shows.
One of Apple's main strengths lies in its ability to lock users with cloud data, digital shopping and synergies between proprietary hardware devices. IPhone users are often reluctant to switch to Android devices as they would be stranded out of this ecosystem – and a unique authentication system strengthens the barriers of this walled garden. For example, a user who logs into an application with an Apple account would likely lose his data when he switched to the Android version.
Can Facebook and Google respond?
The move of Apple does not leave Facebook and Google with many options. Facebook and Google will certainly not protest by pulling their iOS apps, and there is no way to challenge Apple's new rule for developers. It's hard to know how many iOS users will connect with Apple instead of Facebook or Google, but both companies could see less data flow from iOS users, which could reduce the number of users. The effectiveness of their targeted ads.
<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = " More from The Motley Fool "data-reactid =" 72 "> More from The Motley Fool
<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "John Mackey, CEO of Whole Foods Market, an affiliate of Amazon, is a board member of The Motley Fool. Suzanne Frey, an executive member of Alphabet, is a board member of The Motley Fool. Randi Zuckerberg, former director of market development and spokeswoman for Facebook, as well as the sister of her CEO, Mark Zuckerberg, is a board member of The Motley Fool. Leo Sun owns shares of Amazon, Apple and Facebook. Motley Fool owns stocks and recommends Alphabet (A Shares), Alphabet (C Shares), Amazon, Apple, Facebook and Netflix. The Motley Fool offers the following options: $ 150 long calls on January 2020 for Apple and $ 155 calls from January 2020 on Apple. The Motley Fool has a disclosure policy."data-reactid =" 80 ">John Mackey, CEO of Whole Foods Market, an affiliate of Amazon, is a board member of The Motley Fool. Suzanne Frey, an executive member of Alphabet, is a board member of The Motley Fool. Randi Zuckerberg, former director of market development and spokeswoman for Facebook, as well as the sister of her CEO, Mark Zuckerberg, is a board member of The Motley Fool. Leo Sun owns shares in Amazon, Apple and Facebook. Motley Fool owns stocks and recommends Alphabet (A Shares), Alphabet (C Shares), Amazon, Apple, Facebook and Netflix. The Motley Fool offers the following options: $ 150 long calls on January 2020 for Apple and $ 155 calls from January 2020 on Apple. Motley Fool has a disclosure policy.
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