Apple encroaching on Facebook ?! $APPL $FB

Today i picked up this interesting article from CNBC

It talks about the future of Social Communication which will be diverging into two main types – Privatize  and Public Social communications. As part of IOS 15, Apple will be introducing

1.Able to hold FaceTime video calls with Android and Windows users for the first time. feature called SharePlay, which lets you hold a FaceTime call and watch a streaming movie, listen to music, or share your screen with your contacts

3.IMessage is getting a boost as well, with new features that make it easier to share web links, photos, Apple Music tracks and Apple News articles with your contacts

Apple is laying the groundwork for a suite of social features designed to let you do a lot of what you would normally do on Instagram and Facebook, only with more emphasis on privacy. 

Facebook is also trying to recalibrate its product strategy to a more privatized Social communication via WhatsApp / Facebook/ Instagram and monetize using Libra. However it appears the pace is still some way off from implementation and Apple is now attempting to usurp Facebook to first mover advantage to this private social communication mode.

My thoughts on this are the impact of the IOS features on two main audience – Non-IOS and Existing IOS users.

  1. Apple private social communication features may succeed in attracting IOS users who value privacy into NOT using Facebook ecosystem. However is this still strong enough to totally break the network effect of Whatsapp/Facebook/Instagram? the answer is no as there are still many non-IOS users out there.
  2. Apple’s premium branding strategy is still an obstacle which forces Non-IOS users to decide between costs and privacy. Costs still wins when it comes to practicality.

Apple may succeed in undermining Facebook’s ad revenue short to mid term wise due to the

  1. iOS privacy feature that limits how companies like Facebook can use your personal data to send you targeted ads
  2. Further locking in IOS users and attracting them away from Facebook’s ecosystem

Long term wise , It depends on how Facebook react. Will they be able to roll out a private social communication strategy in time and effectively?

As for Apple, I would rather see them rolling out new product lines (e.g. electric car, streaming ) instead of encroaching on Facebook. The private social communication features doesn’t really create new markets for Apple. It just further tightens Apple’s grip on existing IOS users which is not exactly what Apple should be prioritizing now.

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