Apple’s ads advantage | Financial Times

Slipped in among Apple’s flashy hardware announcements on Tuesday was the more significant news for its app ecosystem that the latest update to the iPhone operating system will be pushed out next week.

The release of iOS 14.5 marks more than a few added features and bug fixes. It will see the introduction of controversial privacy restrictions, including requiring apps to get users’ explicit permission to gather ad targeting and tracking data. The rollout was delayed last autumn after developers complained that they were unprepared for the changes, which threaten to wipe billions of dollars in revenue from ad-reliant businesses. 

Our San Francisco bureau reports they could suffer a double whammy, with Apple expanding its own advertising business, according to two people familiar with its plans, just as it brings in the new privacy rules.

It plans to add a second advertising slot, in the “suggested” apps section in its App Store search page by the end of the month, according to one of the people, and will allow advertisers to promote their apps across its whole network, rather than in response to specific searches. Apple is estimated to already earn around $2bn a year just from search ads in the App Store, with 80 per cent margins.

Its biggest money-spinner in the App Store is its 30 per cent share of sales by publishers and this will come under attack in early May when Epic Games brings a court case in California arguing it is anti-competitive.

In the meantime, Apple and Google were grilled by senators on Wednesday about their app store dominance and the huge profits they were making. Senator Amy Klobuchar cited a House report that found Apple earns $15bn-$18bn from the App Store but spends no more than $100m per year to operate it.

It also has an unfair hardware advantage, say competitors. Kirsten Daru, general counsel for Tile, a lost-items tracker, pointed out to the Judiciary hearing that Apple’s similar AirTag product (see Tech tools below), belatedly unveiled on Tuesday, used Ultra Wideband. Tile has been requesting access to this technology in Apple devices since 2019, but Apple had resisted this so it would have a “first-to-market advantage”, she alleged.

As well as the courts and politicians, regulators may also have their say soon on Apple antitrust concerns. Federal Trade Commission nominee Lina Khan told Congress on Wednesday that regulators “need to be especially sceptical and really look closely” at Apple’s App Store advantage.

The Internet of (Five) Things

1. Wirecard’s euro-stuffed shopping bags
Wirecard employees hauled millions of euros of cash out of the group’s Munich headquarters in plastic Aldi and Lidl bags over a period of years, according to former employees, suggesting that the payments company was looted even more brazenly than previously known. The German parliament has asked a special investigator to expand a probe into the Big Four firm’s audits of Wirecard after the initial report uncovered serious shortcomings.

2. Europe scrutinises Binance crypto exchange
European regulators are examining whether Binance, one of the world’s biggest cryptocurrency exchanges, has complied with securities rules over its launch of trading in stock tokens. They will seek to determine whether the tokens comply with rules governing transparency and corporate disclosures.

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3. Ant fund shrinks dramatically
Ant Group’s money market fund has shrunk to a more than four-year low as users shifted their cash in the face of China’s crackdown on Jack Ma’s payments group. Funds invested in Ant’s flagship Yu’E Bao fund fell 18 per cent in the first three months of the year to Rmb972bn ($150bn) as the group pushed users to switch to other providers’ funds.

4. Chip shortages worsen for auto industry
The chip shortage crisis facing the car industry deepened on Thursday, with Renault warning of months of disruption and Jaguar Land Rover and Ford announcing temporary plant closures. In other semi news, Canadian chip developer Alphawave IP is to IPO in London at an expected valuation of about $4.5bn. Lex says by listing in the UK and using the proceeds to open a research centre in Arm’s home of Cambridge, the company can raise both capital and its own profile.

5. HBO passes Netflix in US subs growth
The streaming competition is heating up for the market leader. HBO signed up 2.8m US subscribers directly to its Max streaming service in the first quarter, attracting them with blockbuster films such as Godzilla vs Kong. Netflix lured only 450,000 new subscribers in the US and Canada in the same period.

Forwarded from Sifted — the European start-up week

The global fintech sector is often reduced to naming a handful of the best-known start-ups: Stripe, Monzo, Revolut and Robinhood. But beyond this hoard of companies worth $1bn (or “soonicorn” companies soon to be worth that) Sifted asked five VC partners and one top angel investor to nominate the fintechs across Europe they think are most underrated. Here is the list which includes companies such as Comply Advantage, Marshmallow and Capital on Tap.

Elsewhere in European start-ups this week, Sifted takes a look at a decade of payments company GoCardless. It has also been a big few days for European companies raising venture capital money with insurtech Alan, carpooling company BlaBlaCar and foodtech start-up Deliverect all raising big rounds. 

Tech tools — Apple AirTag

The reviews are already in for Apple’s long-awaited AirTag accessory, which was finally launched at its Spring Loaded event on Tuesday and will be available on April 30. Engadget says the coin-sized $29 (£29) devices have a user-replaceable battery, Bluetooth radio, NFC for pairing, “and a little speaker that plays a surprisingly loud alert tone when you need it”. The Verge says that while they will mainly be used for finding lost keys, it was successful in its test of tracking down a person in another city, using the Find My function.