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Apple Inc. (AAPL) Doesn’t “Understand Every Detail,” Stock Sinks

Apple Inc. (NASADAQ:AAPL)

Apple Inc. needs to grow, but there’s some places the firm directly refuses to go in order to boost its sales. As the firm’s shares slump, and some on Wall Street call for a massive drop in the coming months, Tim Cook has made it clear that Apple doesn’t want to “understand every detail about your life” in an interview with NPR on October 1.

Apple Inc. logo

It’s a theme that keeps coming up at Apple, and it might become more central as time goes on. Mr. Cook was taking a swipe at Google and Facebook, two of its major rivals in a number of spaces, when he made the statement about privacy. Apple wants the world to understand that it keeps data safe where everyone else wants to use it to their own end.

Apple protects your data (sort of)

Apple Inc.   is certainly using privacy as a way to help sell its products, but Tim Cook told NPR that he comes to the issue from “a values view, not from a commercial interest view.”

That means that Apple’s not going to start showing you huge amounts of display ads any time soon, but the firm still doesn’t keep your data free and clear of all snoopers. Mr. Cook told NPR that though Apple doesn’t have any sort of back door for state bodies to crawly through, it does supply them with info.

Like most other tech firms, “if they ask for us in a way that is correct and has been through the courts, as is required — to the degree that we have that information — that we give that information,” Mr. Cook said. Given how easy it has been for the NSA to get those kinds of court orders it’s not clear how much of a barrier Tim Cook is really putting up.

He added that Apple tries to keep as much user info as possible on the phone rather than in its own servers. It’s not quite clear to what extent that’s true, though Apple does offer some info in its letters on the subject and its privacy policies. The firm updated its policy on Thursday, and that update was the subject of the radio interview.

The firm doesn’t share any data with the state unless the state goes through a proper process. At least you can be sure that Apple doesn’t use your data in order to convince you to buy more stuff, though there’s questions about where exactly that line is too.

Apple neglects ads (sort of)

Apple doesn’t have nearly as many users as Google or Facebook,  but the firm has access to a huge amount of data from the majority of the world’s wealthy. Tim Cook clearly doesn’t think that selling ads is the way to go for Apple, despite the massive sales boon that could be garnered from the space.

When it became clear that Apple was planning to allow users on iOS9 to block ads from rivals like Google rumors spread that the firm might try to expand its ad business. We’ve seen no evidence of that thus far, though Apple does run a small, when compared with Google at least, ad business for apps on iOS devices.

With Tim Cook coming out so strongly against data collection it’s not clear how Apple would get away with boosting the size of its ad business. The firm may be able to find some way to keep the data on the phone and still serve up ads that are targeted to users, but that may step over the lines that Tim Cook has drawn in the sand.

Apple  posts suggestions for apps and other media that users might like, but Tim Cook doesn’t think there’s a problem in using data from users’ history in order to make those ads better targeted. He told NPR  “We think customers are fine with that, what they don’t want is for your email to be read, then to pick up on keywords in your email, and to use that information to market you things on a different application.”

Apple does make ads, but the firm doesn’t put them out there in a way Tim Cook feels is wrong. There may be a line here between good use of user data and bad use of user data, Tim Cook clearly sees one, but it’s not drawn as starkly for the rest of the world as is for Mr. Cook.

Looking for growth at Apple

Those with shares in Apple  may be sorry to see the firm neglect such a big business opportunity. Apple is a strong hardware business and focus on the core may be the best thing for growth in the long term. There’s certainly an argument to be made that Apple’s carry on in relation to privacy could be a big boon for hardware sales going forward.

Privacy may be a massive trend in the years ahead. The current generation of over-shared teens may react to their own culture once they come of age. Keeping images and text safe from prying eyes is becoming more and more exigent as stories about hacks and state spying keep cropping up.

Apple has only two real competitors in the mobile platform world, and it’s already beating them both roundly in the premium space. Google and Microsoft both have big ad businesses, and both are known to use the weight of data from their email and search businesses in order to target their ads more effectively.

Apple doesn’t want to know every little detail about your life, but the firm does want you to know that it doesn’t want to know. In a world that’s likely to get more and more concerned with keeping things secret without giving up on tech, Apple will e thought of as the only mobile device maker that doesn’t ant anything to do with your data.

Moving into ads right now would hurt that goal, but Apple may be able to do it while still keeping a reputation for secure devices. The firm already offers up ads, but Tim Cook says they’re the good kind of ads.

Perhaps the future for Apple involves not simply tying up and shielding data, but bringing the right kind of ads into the world. We’ll have to wait and see what Mr. Cook has planned but, for the time being, it’s clear that Apple wants to project the idea of Cupertino as a bastion of data security. The firm may use your data for some things, but compared to the competition it’s a deity of data control.

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