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Investment bank Cowen sees Apple’s decision to delay new iOS 14 privacy features as a positive outcome for both consumers and the relationship between Apple and developers.
A specific privacy feature coming in Apple’s next update requires apps to get permission from users to track them on other apps and websites. Apple has since said that the feature will launch in early 2021.
In a note to investors seen by AppleInsiderKrish Sankar, an analyst at Cowen, said the move is “a bit positive from a developer relationship point of view.” This is because while it is a boon for privacy and consumers, the change is likely to have an effect on developer revenue and possibly overall App Store profit.
The feature refers to the Advertiser Identifier Tracking Tag (IDFA), which enables applications to collect aggregated data without personally identifiable user information. Allowing users the ability to opt in to IDFA tracking gives them much more control over their data on iOS.
Apple’s decision to require permission to use IDFA has been controversial among advertisers. Facebook, for example, has warned companies that they could see as much as 50% drop in Audience Network revenue on iOS devices.
“We believe Apple’s decision to delay the new IDFA-related feature at least helps maintain the status quo in developer relationships, but could also have an unclear impact on App Store revenue in the short term.” Sankar wrote.
The analyst notes that without IDFA, advertisers could have a much more difficult time marketing or selling products to end users. Also, it will be more difficult to serve targeted ads, which typically lead to higher prices.
Though the change comes despite protests from advertisers, Cowen notes that the three-month period between WWDC 2020 and the release of iOS 14 might have been too short a period for developers to update, test, and formulate new algorithms. of advertising technology.
For example, without IDFA tracking, companies that rely on targeted advertising will likely need alternative statistical models or methods to match user profiles to products, services, and ads.
“Apple continues to advocate and implement user privacy policies that we believe are aimed at improving the user experience of the iOS platform in the longer term. While it is unclear if there is any short-term impact on App Store revenue, the decision to balance developer concerns and feedback is also a welcome measure to ensure that the iOS platform remains attractive to developers in the medium / long term, “wrote Sankar.
Cowen maintains its AAPL price target of $ 133, which is based on a 25x multiple for Apple’s core businesses and a 41x multiple for Services.
