Facebook (parent company Meta Platforms,
If the feuding tech giants were dueling swordsmen, Apple would have finally found a hole in Facebook's armor. That hole was Facebook parent Meta's dependency on advertising revenue. The iOS 15.2 update late last year allowed users to opt out of data collection for advertising from within the settings menu, prompting a massive fraction of users to do so.
The attempts of Facebook's parent company to spin itself as a victim of Apple's decision by sharing figures that show it would lose $10 billion to the decision are largely falling on the deaf ears of consumers. Investors, though, are paying close attention to the firm as it reels from a potentially record-breaking bad week.
Just over a quarter of Meta stock was wiped out on news of a terrible fourth quarter, erasing $200 billion in what has to be a Wall Street record. Meta blamed Facebook's declining userbase, which comes as the platform loses relevance to consumer-preferred ByteDance's TikTok, as well as other platforms. The effects of Apple's changes had been immediately felt as well, stinging the company at the tail end of the year.
So what does this say about Facebook/Meta?
In terms of consumer data collection, Apple has developed an attitude that serves as the antithesis of Facebook's attitude of digital manifest destiny (for the most part). While it's hard to argue that Apple has given users the option to deny data collection out of the kindness of its collective heart, the tech giant's move to undercut its competitor has certainly handed many consumers a decisive win.
It also means that the titanic advertising juggernaut that drove Facebook to mammoth fortunes remains on tenuous ground. While other advertising-based tech firms noticed the effects of Apple's changes, it was only Meta that felt the sting to such a drastic extent.
There's certainly a lot to be said about the ethics of Facebook's data-harvesting reliant advertising model. However, from a technical standpoint, Apple's move should be very concerning.
As other competitors take notice, its likely more similarly tailored updates could come in the future, potentially shutting Facebook out while allowing its rivals to solidify their own positions. With Facebook's declining ad revenue, user count, the high cost of its metaverse ambitions, and the "headwinds" it sees coming, I'd argue that more opportunities for competitors to undercut Meta's titanic market shares are on the horizon.
