Apple
AAPL
has reportedly blocked updates to several Chinese apps (including TikTok and QQ) on its App Store that it found were violating its App Tracking Transparency policy by adding Chinese Advertising ID (CAID) support to software updates, preventing them from being distributed in the App Store, per a Financial Times
report
.
The introduction of App Tracking Transparency by Apple has forced developers and advertisers to ask permission to track an iPhone’s unique device identifier known as the Identifier for Advertisers (IDFA), a move intended to enhance user privacy.
In March, tech groups in China led by
Baidu
BIDU
,
Tencent
TCEHY
and TikTok parent ByteDance worked together on a system called CAID (developed by the Chinese Advertising Association) for tracking iPhones for advertising, which claimed to provide a way to track users on Apple devices, even if the user denied permission for apps to use the IDFA.
The IDFA is a privacy protecting tool, which allows advertisers to track whether the same user who saw an ad for their product within a particular app, subsequently visited their website without revealing the actual identity of the user.
Apple’s rules forbid companies to work around its policy with software like CAID but large developers in China were gambling on Apple being afraid to ban popular apps that might limit the appeal of iPhones in China.
This move is expected to aid this Zacks Rank #2 (Buy) company in warning tech companies in other countries looking to implement similar measures to dodge App Tracking Transparency. You can see
the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
.
Year to Date Performance
Image Source: Zacks Investment Research
Apple’s App Tracking Transparency Repels Advertisers
In light of the attempts made to protect user privacy, Apple might lose advertiser spending on its platform. The company’s shares have returned 5.5% in the year-to-date period, underperforming the
Computer – Mini computers
industry and S&P 500’s rally of 6.6% and 16.6%, respectively.
According to early data from the ad-measurement firm Branch Metrics Inc, cited by Wall Street Journal
report
, less than 33% of iOS users globally have permitted apps to track them across other apps. The remaining 67% of iOS users opted not to permit apps to track their activity.
As a result, the amount of advertiser spending on Apple’s mobile platform has fallen by about one-third between Jun 1 and Jul 1, while spending on
Alphabet
GOOGL
owned Google’s Android rose over 10% for the same month, according to ad-measurement firm Tenjin Inc.
The lack of targeting caused by the introduction of App Tracking Transparency is expected to have caused the decline, with less granular data provided to advertisers about consumers they wish to target.
Without proper user tracking, advertisers have significantly less data about a user’s interests, preferences, and more. The type of data collected from tracking helps advertisers to ensure that their ads are being targeted to potential customers.
Advertisers and companies, such as Facebook, use that data to compile a profile of a user. Facebook has argued that Apple’s move will undermine the financial viability of smaller companies reliant on personalized ads.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.
Click to get this free report