October 1 (Reuters) – Apple (AAPL.O) Recent changes in the privacy of iPhones are signs that it may be looking to tap into an Internet advertising market dominated by Facebook and Google, said an analyst at RBC Capital Markets.
Since an April software update, most iPhones have allowed users to decide which apps can track user activity – crucial information that helps companies like Facebook deliver personalized ads to users and measure their impact.
The feature, which Apple calls Application Tracking Transparency (ATT), has concerned many digital advertising and mobile gaming companies, including Facebook, which it says has made it more expensive and difficult for brands to advertise on their platforms. read more
“We see (the privacy changes) as a sign that Apple may want to compete in global advertising,” RBC analyst Brad Erickson said in a customer note Thursday night, as coverage of Facebook, Amazon and Alphabet began. with “superior performance” ratings.
Erickson has a four-star rating for the accuracy of its Internet company earnings estimates and recommendations, based on Refinitiv data.
“(Apple) can use data privacy as a cover while investing in a behind-the-scenes search algorithm,” Erickson said, referring to potential ad revenue from a Google-like search engine.
If advertisers “had no choice but to fly blind with Apple’s signal loss,” Google-owned YouTube and Amazon’s Connected TV could benefit as advertisers’ next best alternatives, Erickson said.
Evercore ISI analysts also pointed to Apple’s potential advertising ambitions in August, saying that “blocking third-party advertising” would give it a successful start in advertising. Still, they pointed out that ATT was intended for user privacy rather than monetization.
Apple, Facebook and Alphabet did not immediately respond to Reuters requests for comment.
Report of Tapanjana Rudra in Bengaluru; Editing by Sachin Ravikumar and Anil D’Silva
Our Standards: The Thomson Reuters Trust Principles.