Apple's latest weapon against Google's Android OS is privacy
How do you win against your competitor that doesn't mind lower margins and gives away mass market products like Android One for free?
It is very, very difficult for a company like Apple, which is addicted to its fat margins. Apple dipped its toes in the lower margin mainstream phone market with the iPhone 5C. But even that wasn't all that cheap and it failed (hint: there is no iPhone 6C this year).
So, coming back to the question - how do you compete?
You give people something that Google can never offer. You give them privacy by not collecting and using their data.
Just days after Apple launched the iPhones, its CEO Tim Cook has written an open letter for customers. Here is the meaty part of the letter:
"We sell great products. We don't build a profile based on your email content or web browsing habits to sell to advertisers. We don't 'monetize' the information you store on your iPhone or in iCloud. And we don't read your email or your messages to get information to market to you. Our software and services are designed to make our devices better. Plain and simple."
Cook also tells users that Apple has never worked with governments to create backdoors in its products or provide government agencies access to its servers. "And we never will," he said.
The letter is accompanied with a new section dedicated to privacy on the Apple website. Here, the company has listed several pro-privacy steps it is taking. Of particular note is a new feature in the iOS8.
"On devices running iOS 8, your personal data such as photos, messages (including attachments), email, contacts, call history, iTunes content, notes, and reminders is placed under the protection of your passcode," the company explained. "Unlike our competitors, Apple cannot bypass your passcode and therefore cannot access this data. So it's not technically feasible for us to respond to government warrants for the extraction of this data from devices in their possession running iOS 8."
Wow! If true, this is a big deal for smartphone users.
Apple's new privacy policy is apparently is so good that it even pleased Christopher Soghoian, ACLU's top technologist and an incredibly cynical man when it comes to user privacy and phone companies. He tweeted, "Apple's old policy for extracting user data from iPhones for law enforcement: Come back with a warrant. Their new policy: Get lost."
This is also something that Google, the creator of Android, will find almost impossible to match. Though there are reports that Google will offer full system-wide encryption with the next version of Android, it is almost certain that the company won't stop collecting user data for its own purpose.
The idea is that for companies like Google, Gmail is not the product. Users are products because Google uses the data collected from Gmail users to serve advertisements. That is how it makes billions of dollars every quarter.
Android is an OS that is given away for free to phone companies. But as more and more Android phones reach in the market, Google will have more people using its apps and services. This in turn allow the company to serve advertisements to greater number of people.
Android phones are bad at leaking data. Of course, Google collects all sort of data that it then uses in various ways. In some cases, this data is used to power services like Google Now, which always tracks you and knows your exact location almost all the time. By the way, Google Now is a pretty useful service. In some other cases, this data is used to help advertisers so that Google can show you relevant ads.
But it is not only Google. Other apps too collect data from people's smartphones. Facebook, for examples, collects a lot of data. Even games like Candy Crush collect a lot of data that in the ideal world they shouldn't have.
By putting privacy as one of the top features of iPhone and iPads, Tim Cook is saying that you may pay a high price for Apple products but then also get peace of mind when it comes to your private data. It is a solid proposal. And if consumer's find it enticing, Google may have no way to counter it without turning its business model on head.
The only problem for Apple, however, is that most people are callous about their private data. When there is a choice between privacy and free, free often comes out the winner. This is true in real world as well as on the web. If someone starts offering free meals in a restaurant in exchange of address and phone number, a huge number of people will line up outside. They won't mind that for the next one year they will get mails at their home address telling them about the latest offers in a nearby mall.
Android is free to use for phone companies. Android phones are cheap and plenty. They offer something that Apple can't offer - choice. So, it is possible that strong stance on privacy may not help Apple much. But at the same time, you can't fault the Apple proposal. The company has identified Google's weak spot and it is hitting there with all its might.