An ad hoc group of Chinese tech companies, including such names as Baidu, Tencent and ByteDance (TikTok), apparently has given up its plan to circumvent the App Tracking Transparency feature of the iPhone operating system Apple Inc. (NASDAQ: AAPL) introduced in April. The group had developed and was testing its own ad tracking program and was prepared to release it in March when Apple squashed the move by rejecting App Store updates to several apps that were found to be using the tracking system.
A report in the Financial Times cited Rich Bishop, chief executive of AppInChina, a leading publisher of international software in China, who said, “This is a clear victory for Apple, and also consumer privacy, as the tech giants of China have been forced to back down and comply with Apple’s rules.”
The story noted that the development of the new tracking system had the support of at least two government-backed groups, but “it was not clear if these groups had the full support of Beijing.”
What happens when the government does not support a company was made quite clear on Sunday. The government told Apple to remove the ride-hailing app for DiDi Chuxing from the App Store, claiming that the app misused customers’ personal data. DiDi’s parent company, DiDi Global, came public last week, raising $4.4 billion and valuing the firm at around $70 billion.
DiDi Global’s IPO price of $14 a share rose to a high of $18 on its first day of trading but traded at $12.45 in Tuesday’s premarket session, a drop of nearly 20% from last Friday’s closing price of $15.53. In 2016, Apple invested $1 billion in DiDi Chuxing.
Apple’s ad tracking feature, which requires an app to get people’s permission to track them, has driven down the price of ad space on iOS and pushed up the price of advertising on Android-powered devices. The Wall Street Journal reported Monday morning:
Digital advertisers say they have lost much of the granular data that made mobile ads on iOS devices effective and justified their prices. In recent months, ad-buyers have deployed their iOS ad spending in much less targeted ways than were previously possible, marketers and ad-tech companies say. The shortage of user data to fuel Facebook Inc.’s … suite of powerful ad-targeting tools reduces their effectiveness and appeal among some advertisers, ad agencies say.
Citing data from ad-measurement firm Branch Metrics, the Wall Street Journal noted that less than a third of iOS users are choosing to allow apps to track them. According to a report from Eric Seufert at Mobile Dev Demo, more than 70% of iOS devices have been upgraded to a version of the operating system that requires compliance with Apple’s App Tracking Transparency feature.
Finally, Bloomberg’s Mark Gurman reported over the weekend that Apple is “ramping up efforts to decentralize out of Silicon Valley.” He cites conversations with employees who have complained about the high cost of living in the area, difficulties in recruiting a more diverse workforce and the need to go where top engineers and designers already live and work now. Apple also could reduce its cost of operations if it didn’t have to pay Silicon Valley salaries.