In early June, Apple (NASDAQ:AAPL) announced many features of its newest mobile operating-system update, iOS 9, during its Worldwide Developers Conference. And while the greater part of the iOS 9-centric keynote speech was focused on its new proactive assistant features, expanded and improved search functions, and updated Apple Maps and Apple News apps, the developer-heavy audience responded with the most enthusiasm when Apple affirmed its commitment to iPhone and iCloud privacy.
However, it seems Apple had a few further surprises relating to privacy: the company announced iOS 9 will allow an ad-blocker for mobile Safari. As Apple describes the addition in its developer library, content blocking is a fast and efficient way to block cookies, images, resources, pop-ups, and other content. The user can activate or disable the ad-blocking service, but it's a safe bet that many will choose to turn on the function.
The flip side is, of course, this will likely result in increased pressure on the online entities that depend on revenue from those annoying pop-ups. This new move may make it even harder for advertisers to monetize Apple's user base.
No more sneak-and-peeks, but ads do serve a purpose
Apple's going through great pains to play up its privacy features with iOS 9 by stating your data remains on the device. However, saying third-parties can't see any of your data is slightly inaccurate. Right now, advertisers have access to the apps you have on your phone under iOS 8. Apple will end that ability when it rolls out iOS 9.
According to Amir Efrati from The Information, entities that rely on ad-related revenue -- specifically, Facebook (NASDAQ:FB) and Twitter -- have been scanning iPhone users' phones to see what type of apps they have. That data is used to better target ads that appear on the entities' social-media sites. In theory, better targeted ads should be more effective, and, of course, should bring in more revenue.
A good deal of the positives of data collection and targeted marketing are lost in the greater privacy debate, but there is an argument for data collection. To be fair to advertisers, for example, there is an upside to better targeted ads. If an iPhone user is in the market for a product, targeted ads could potentially save the user money by alerting that user to sales and deals. In addition, by understanding a user's personal tastes and preferences, that user could discover new products of interest.
Also, in many cases, ad dollars serve as a third-party payment system of sorts, allowing many apps to come to Apple's App Store free of cost to the user. The app developers are able to pay salaries, development costs, and upgrade fees from advertisements, sparing others from paying these costs directly. Any potential risk to that system could hurt app developers -- and, by extension, Apple's app ecosystem.
Zuckerberg and Cook's war of words
With iOS 9's new moves, it appears Tim Cook and Mark Zuckerberg are moving further apart in their thoughts on Internet privacy. While Zuckerberg has improved user features surrounding his site, Cook appears to fully commit to privacy. Last year, the two engaged in a brief but public spat regarding their divergent views.
First, Cook wrote a message on Apple's privacy site: "A few years ago, users of Internet services began to realize that when an online service is free, you're not the customer. You're the product. But at Apple, we believe a great customer experience shouldn't come at the expense of your privacy." While Cook didn't specifically mention any company, it was widely interpreted as a dig at Facebook and Google.
In response, Zuckerberg addressed the comment by mentioning Apple directly in an interview with Time: "What, you think because you're paying Apple that you're somehow in alignment with them? If you were in alignment with them, then they'd make their products a lot cheaper!"
Since then, the rhetoric has cooled while the financial performance has only heated up: Apple reported the highest quarterly income ever on the back of iPhone 6 sales after raising the price $100. And Facebook is performing well too; it reported 2014 year-over-year revenue growth of 58%. So perhaps people are less concerned about their privacy and more concerned about having companies make a high-quality product. For advertisers without the scale and market penetration of Facebook, however, Apple's newest move could be a strong blow indeed.
Jamal Carnette owns shares of Apple. The Motley Fool recommends Apple, Facebook, Google (A shares), Google (C shares), and Twitter. The Motley Fool owns shares of Apple, Facebook, Google (A shares), Google (C shares), and Twitter. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.