With Meta’s big metaverse bet, web3 proponents have called out CEO Mark Zuckerberg for the centralized nature of Meta’s platform, which undermines their envisioned utopian metaverse that would empower the common user and be built with decentralized technologies.
But considering Zuck’s latest press comments, this begs the question, if not Meta, which company poses the biggest threat to a decentralized metaverse?
Zuckerberg, Meta’s chief executive officer (CEO), might have a short, sweet answer to this question: Apple, if his latest statement is any indication.
Apple’s absence from the newly-formed Metaverse Open Standard Group, a collaborative initiative comprising multiple large companies assembling to form a standardized and open virtual world, was pointed out by Zuckerberg.
In his view, the company’s absence in the group indicates its refusal to support an open metaverse. Moreover, it may also signal Apple’s intention of creating yet another walled garden similar to its iOS system. Obviously, Zucks is the last person that should be virtue signaling about being open and demolishing walled gardens. But is there any validity to his claims about Apple? While he and Meta get more than a fair amount of hate from the Internet, especially the web3 sector, Apple, doesn’t get as much flak.
Why does Zuckerberg, whose Meta had a clear head start with metaverse initiatives through its acquisition of Quest and other aggressive investments, consider Apple such a threat? He admits that Meta and Apple are in a deep economical and philosophical battle, but is there more to it? Let’s take a deep dive into what Apple has been building for the past decade and how these things can potentially change the phase (and face) of the metaverse.
The Apple Metaverse Potential
Rumors have surfaced that Apple is finally developing its first (augmented/virtual) AR/VR headset, which many see as the company’s planned foray into the metaverse. But the Cupertino-based tech titan has not yet released any official announcement about a new product category.
But while Apple isn’t as aggressive as Meta in pushing the 3D world concept, its potential to be a catalyst (or disruptor) of this digital universe is as big as the company itself. But it’s not only Apple’s perceived ideology that may pose a threat in an open metaverse but the company’s massive assets, which can potentially influence the future of the digital universe.
First, the company already has 1.8 billion active devices worldwide, allowing it to position its AR/VR headset as a complementary device, increasing the virtual device’s utility, and may serve as a foundation for its “private” metaverse. Plus, it can potentially integrate its virtual assistant, Siri, into its headset, which can enhance users’ metaverse experience.
Second, Apple has proven that even in the post-Steve Jobs era, it can still maintain robust sales and successfully expand new product lines. And while it’s not certain if the rumored AR/VR headset can be a success, the company’s track record in sales, product launches, and market rankings is nothing to scoff at.
Third, Apple has already shown its ability to command a sizable fee for its platform users, which developers willingly pay in exchange for the App Store’s massive audience. This proven structure can be replicated on its closed metaverse (which can potentially have a ready global audience) and be a possible massive revenue generator for Apple.
Moreover, with Epic Games serving as a cautionary tale, Apple has also proved its willingness to raise its gauntlet to whoever may boldly violate its policies. This tight grip rule may also manifest if it were to develop its own metaverse.
Fourth, it has also shown its ability to create exclusive content, which has already attracted millions of paying subscribers worldwide. In other words, it can potentially apply its content-making and subscription expertise to its metaverse to keep it more immersive and profitable.
Critical Pieces for a Possible Apple Metaverse
Apple is the world’s largest company by market cap, you’d better believe it has the resources to build a metaverse; perhaps even a secret one. Although no evidence has surfaced, we can identify many moving pieces that help us see the bigger picture of what could be on Apple’s roadmap.
The App Store
The App Store, which Apple launched with its iPhone 3G (its second phone), sparked a new generation of mobile applications. The digital store currently has 2.11 million mobile applications, with gaming as its most popular category, allowing videogames to generate revenue through in-app purchases and advertisements. Fun fact: gaming is one of the key onramps to the metaverse, with gaming metaverses like Axie Infinity’s Lunaria, The Sandbox, MOBOX, etc. dominating in web3. In 2021, Apple paid $60 billion to its iOS developers, and users have spent an estimated $85.1 billion on subscriptions, premium apps, and in-app purchases.
While the App Store has had significant success through the years, it has also faced challenges along the way, including its clash with Epic Games, currently the 7th largest gaming company in the world.
Epic Games has challenged Apple’s 30% fee on every purchase made inside the App Store and its tight-grip rules on disabling in-app purchases outside the store’s methods. It has implemented changes in its Fortnite game to bypass the App Store’s payment system, leading Apple to block the game from its store.
Now imagine being a user or developer if the App Store becomes the central hub or “global marketplace” of the metaverse. You’d be forced to abide by all its policies, including its fees, or possibly face the same fate as Epic Games. It’s not a farfetched idea. When its XR headset ships, that could signal the beginning of its metaverse era.
The iPhone
When Apple released the iPhone in 2007, it became the growth driver of advanced touchscreen phones, once again being the pioneer and innovator of a new device category and gamechanger of an industry. The phone turned out to be so successful that it became Apple’s single biggest revenue generator.
Why is this important?
The hundreds of millions of iPhones distributed across the globe have made Apple the largest AR platform.
From 2008 to 2018, iPhone has proven itself to be a market leader in the smartphone space. In fact, it has achieved a consistent 200 million+ unit sales from 2015 to 2018. In 2020, the iPhone sold more than 206 million units, and in the fourth quarter of that same year, it became the world’s highest-selling smartphone. In the second quarter of 2022 alone, it brought a fresh $50.57 billion in sales, proving its dominance among Apple’s suite of products amid the looming recession.
Right now, it appears to be taking a more cautious approach to the metaverse, gently teasing its users with the AR features first. Remember, Apple collects a ton of data from its users on a daily basis. While we don’t know exactly what the consumer electronics giant has in store in the future, we can say with some degree of certainty that it is likely pursuing Meta’s target market as well. For all we know, it could announce major plans suddenly as it has done in the past.
Until then, the iPhone will remain its dominant AR-enabled device.
Plethora of Devices
Obviously, Apple has other devices too. This is significant because the Internet of Things (IoT) is slated to play a pivotal role in connecting 3D worlds to millions of physical devices, creating a merge between physical and digital realities. Remember, Apple is spending more time on AR at the beginning, which makes sense considering that it perfectly fits its current business model, being one of the largest producers of IoT devices, along with Microsoft and Amazon.
Also see: Metaverse Statistics
The iPad remains the leading tablet device from 2011 to 2022 (based on global shipments) and currently has a 31.5% global market share as of the 2nd quarter of this year. Apple Watch is also leading in the global smartwatch market, with a 52.5% share in global shipments. Apple Mac computers, the granddaddy of the Apple ecosystem, have generated $10.44 billion for the company. (These numbers are the latest statistics for 2022’s second quarter).
Airpods, meanwhile, has already generated an annual income of $20 billion for the company. In fact, in the U.S market, it has surpassed the biggest and most established headphone brands, including Beats by Dr. Dre (which it now owns), Bose, Samsung, JBL, and Sony. As of March 2022, Apple TV has 25 million paid subscribers in the United States and another 50 million subscribers worldwide with a one-year free subscription.
Note that all of these devices can become apertures to the metaverse.
Meta and Apple’s Previous Actions Over Privacy
By taking a closer look, metaverse’s real threat may not entirely lie in its eventual evolution as a closed or open system but in how safe it would be for millions of potential users. Expecting these giants to abandon their revenue-generating business model and go crypto to appease the “web3 bros” is simply wishful thinking. Sure, they might incorporate NFTs at some point, but a blockchain-based Apple or Meta operated by a DAO is unlikely to ever happen.
Besides, web3 will build open metaverses with or without Apple’s and Meta’s permission. That’s the beauty of an open market. Anyone can build whatever they want. And there is room for different types of virtual environments to exist in the future, even for tech giants, which are often ridiculed on web3.
But if Meta and Apple were to manage their metaverses in the future, how are they protecting the safety and privacy of their million-plus users on their current platforms?
By rising above the smoke of their public relations (PR) campaigns of being the paragon of safety privacy, let’s look at what they’ve done with these issues over the past years. Revisiting some of their most significant actions (and issues) is important as they can reflect their possible behavior in handling the privacy side of their respective metaverses.
Commendable Actions
Facebook’s community standards protect its diversified community from imminent dangers by combating harmful and deceptive content, including violence, fraud, bullying, and privacy violations. It also prohibits hate speech, sexual exploitation, misinformation, and graphic content. Furthermore, the social network giant has also been active in repelling hacking and disinformation related to Russia’s invasion of Ukraine.
For Apple’s part, one of its most notable contributions to privacy is its rollout of the Lockdown Mode feature on the iPhone, which adds additional protection from spyware and even state-sponsored hackers. While this feature can benefit every iPhone user, this is intended for high-profile people, including politicians, journalists, and activists, whose life (and privacy) is always on the line.
Another commendable action from Apple was its refusal to agree to the FBI’s request to create a digital master key that could open a terrorist’s iPhone, which may have put millions of users’ privacy at risk if it were created.
However, it needs to be noted that the privacy and security implementations made by both tech giants can be a double-edged sword. If their platforms become too restrictive as a result, it would also backfire massively. Meta, for one, is being heavily accused of censorship due to its policies.
Meta and Apple Controversies
In 2016, Cambridge Analytica, a British political consulting firm (which closed in 2018), was discovered to have harvested data from 50 million Facebook profiles “without” consent from the company. A whistleblower has revealed that the massive data was used for then-presidential candidate Donald Trump’s campaign to create a profiling system that can generate targeted political advertisements.
In 2021, a hacking incident hit Facebook, compromising 533 million data, including users’ names, locations, phone numbers, and email addresses. It said that the incident was caused by scraping, a form of web data extraction, and not hacking. Facebook immediately changed the feature used by hackers to acquire sensitive data.
In Apple’s case, its resistance (or vulnerability) over the Pegasus spy software remains controversial. Created by Israeli tech company NSO Group, Pegasus is an advanced surveillance tool that can break into iOS and Android devices and access encrypted apps. It can spy without requiring users to click a link, making it extremely dangerous. While Apple said that it has already patched the weak spot used by the tool, speculations remain that NSO might have other tricks up its sleeve.
Another concern is the iPhone’s legitimacy as a truly private device, which, according to one academic study, appears to be transmitting data to Apple servers without users’ consent. These data include device location, local internet protocol (IP) address, and even data from devices within a local network. This data transmission is similar to how Android phones work, which send data to Google servers 24/7.
Now that all these things have been laid out, it might be good to ask ourselves: What is the true biggest threat to the future of the metaverse? Is it really the open or closed systems? Or the future drivers of these virtual worlds?
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