We know the GDPR exists which forces companies handling our data be upright stewards of this and disclose to us what they do with it and a fine levied on them by the EU when they mistreat our data. These protections don’t exist in most of the world. I don’t think a GDPR-esque law will ever come about in USA unless the private information of our lawmakers is leaked en-masse and then things will change very fast.

I applaud Apple’s stance on privacy but as was discussed by Ben Thompson on John Gruber’s podcast, it has been convenient for Apple to take this stance. Unlike Google and all of Apple’s competitors, they don’t profit from our data. They profit from hardware and hardware subsidizes software and soon services will become a big income area…and that is the scary part. Services rely on our data, usage, actions and movements as consumers to create a service that works for us. Siri is behind because of Apple’s stance on privacy. They need to know what music I listen to and shows I watch to know what to recommend to me and what to create when they start making their own TV shows. With services becoming more important, Apple will need to abandon their privacy stance in order to be as successful as their competitors. Will they?

The point of this quick post is to piggy-back on what I wrote a few weeks ago regarding Apple’s insanely high prices of late. I am firmly in the camp of Apple’s products being too expensive for most of it’s customers to continue affording. If you are in the average household income in USA and make less than 40K USD a year, purchasing an Apple product is an impossible feat. Further compounded by the strong dollar on the global scale. Apple’s prices continue to go up and one hypothesis I have not seen floated among the blogs I read is Apple’s products cost a lot because that’s the price of privacy.

Finally this week, we started hearing more about low-cost TVs and why they have been so affordable despite being bigger and having more smart features. This is because television company are spying on you using finger-printing and selling this data to whoever wants it. The solution being unplug ethernet from your TV or disconnect it from WiFi. This is not recent news but I’m glad it’s getting coverage because people need to know that every ISP spies on them (use a VPN!) but further, every TV company is always spying on you. It’s such a rampant issue that Apple’s terms for manufacturers is if they want to support AirPlay 2, they must agree to not capture user data with fingerprinting if the user is using AirPlay 2. Apple’s not telling Samsung to stop capturing what the user watches in Netflix or on Cable TV but there is a hard line around fingerprinting Apple’s services and I appreciate that. It means if I continue supporting Apple, even their partners can’t spy on me.

This means that Samsung has to spend money developing a feature that they cannot monetize unlike quite literally every other software feature they’ve baked in to their SmartTVs. 

…which means TV margins are slimmer for companies building in AirPlay 2 or Apple Music. They spend 10 million and never see any return on this except maybe selling more units but most people use ChromeCast instead of AppleTV because most people use Android and Windows. 

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This business decision is exaggerated in Apple’s case in their direct relationship with consumers. I know when I buy any smartphone that’s not an iPhone, it comes with baked in applications that the manufacture made money on by pre-installing where I can’t remove them and we know Google the phone makers sells our data and when you make money on the back-end of a product sale, it allows you to use this to subsidize the sales price. To take this a step further, NetZero was a free dial-up ISP in the late 90s. They achieved this by injecting ads into your computer even if you didn’t have a browser open and monitoring your data and selling it. 

This is why Think Apple needs to lay out in plain text (or a keynote slide) exactly how much the price of an iPhone would be if Apple monetized our data, our lives, our thoughts, our movements and our taps the price of an iPhone could reasonably be $100 cheaper (likely way more. Facebook earns $60 a year per user and they are restricted to the confines of one website and one app). They need to do the math, lay it out for consumers that if they spy on you, iPhones would be cheaper and if you compare that to their competitors in the same industry, the reason the new Samsung phone is $699 instead of $999 is because they make $50 up front by pre-installing Netflix and Blockbuster (yeah, I’m old) and then money on the back-end selling your data to 3rd parties…and this is another reason why Apple products are a premium.

This hasn’t always been the case. Apple has always been premium but it will further illustrate the price of your privacy and further draw a line in the sand regarding the things they’ll never do and in order to maintain their margins, they’ll have to charge more and consumers will then be able to choose if they want to save 10% or have their privacy maintained. 

This is the marketing message Apple needs to use if they’re going to justify higher prices because when the most valuable company in the world continues to raise prices, it just makes them look greedy to non-tech people who just want a new phone.

Update: Tim Cook 24 hours later: 

Meaningful, comprehensive federal privacy legislation should not only aim to put consumers in control of their data, it should also shine a light on actors trafficking in your data behind the scenes. Some state laws are looking to accomplish just that, but right now there is no federal standard protecting Americans from these practices. That’s why we believe the Federal Trade Commission should establish a data-broker clearinghouse, requiring all data brokers to register, enabling consumers to track the transactions that have bundled and sold their data from place to place, and giving users the power to delete their data on demand, freely, easily and online, once and for all.

if Apple can spend some of the money I gave them for products in 2018 toward lobbying the government to protect my privacy, I’ll buy more of their products this year…but let’s face it, I was going to do that anyway.