Apple AirTag Relies on a feature no competitor can match: One Billion iPhones
On Tuesday, Apple announced a long-awaited gadget called AirTag.
Users can attach the $29 coin-sized device to valuable items, such as keys or a backpack, and then find it on a real-time map in Apple’s built-in Find My software.
AirTag competes with several other products on the market, including Tile, whose general counsel complained to Congress Wednesday about Apple’s overall dominance. But AirTag’s most important differentiator isn’t the technology inside the $29 coin-sized stainless steel gadget. It’s other people’s iPhones.
Features of the AirTag
AirTag has no GPS signal, drains the battery quickly and raises questions about privacy. Instead, it sends encrypted Bluetooth signals when attached to a lost object. Those signals to reach the Internet and inform the person looking for their lost device would need to find an iPhone that overhears them.
“Using Bluetooth and the hundreds of millions of iOS, iPadOS and macOS devices in active use around the world, a user can find a missing device even if it can’t connect to Wi-Fi or a cellular network,” Apple explained. “Any iOS, iPadOS or macOS device that has ‘offline search’ enabled in the Find Me settings can act as a ‘search device.’
This product represents a new frontier for Apple: using its installed base of more than 1 billion iPhones as infrastructure to create services unavailable to its competitors. iPhones are now part of a physical network in the world that searches for stolen goods, even if their users never bought AirTag.
“The bottom line is that AirTag is an example of how Apple is using its ecosystem to create a more compelling product than what’s currently on the market,” Loup Ventures founder Gene Munster wrote in a newsletter Tuesday. “Specifically, AirTag will have improved navigation and detection features, as well as more than a billion devices that can be used to find lost items.”
Signing up for the Find My network has benefits for iPhone users who don’t buy AirTags. Many users sign up because the same app can be used to find lost Apple products, and it’s easy to do when logging into an iCloud account on an iPhone.
The Find Me Network can be used to find an iPhone after being turned off, as thieves often do after stealing a phone. (If the device is turned on, it can be reached through Find My iPhone, a similar service that uses the device’s Internet connection and precedes the Find My network.)
Users can also opt out of the “Find My Network” feature in Apple’s settings, though this means they don’t get the benefits of the network, such as finding devices that have been turned off or are not connected to cellular or Bluetooth. (To do this, go to Settings>”Your Name”>”Find Me”>”Find iPhone”>and then turn “Find My Network” on or off.)
The iPhone’s extensive global network
The number of devices participating in the network is critical to a product like AirTag.
Apple describes its Find My service as a “vast global network” and allows third-party accessory manufacturers to release products that also use it.
If the AirTag is lost in the middle of nowhere and there are no Apple devices in the Bluetooth range, it won’t connect to the Internet to send signals or update the user’s map. But in the middle of an American city, where an estimated 42 percent of people have iPhones, and in some neighbourhoods, there are more, you have a much better chance of finding the device that is looking for your lost AirTag.
Apple CEO Tim Cook has previously described Apple’s product strategy as “Apple only,” suggesting that because the company builds hardware, develops software and runs its online services, it can present features that competitors like Microsoft, Google or Samsung cannot.
While Samsung or other major smartphone manufacturers have a similar number of phones in their hands, they do not control the underlying operating system, making it difficult to introduce features like Find My widely at the same time.
For Apple, AirTag is probably an attempt to add distinctive features to its iPhone to dissuade current users from switching to an Android device. It is unlikely to be a major revenue driver.
“While airbags are an added element to our model, we don’t believe that even a very successful launch of this product will make much difference to our projections, given the low price tag of $29,” Goldman Sachs analyst Rod Hall wrote Tuesday.
If Apple becomes more adept at using its installed devices as privacy-sensitive infrastructure, it could be a solid advantage. Apple’s installed base of iPhones could become especially important as it invests heavily in augmented reality, a technology that merges the physical and digital worlds.
The iPhone’s location-aware network can be used in augmented reality applications such as Pokemon Go, for example, to determine where other players are competing and start group experiences. It provides the sensors and Internet connectivity needed to create real-world digital experiences without creating new hardware every time.
Privacy Corner.
AirTag also represents a major test of Apple’s positioning on privacy.
Since 2015, Apple has advertised privacy and security as the main differentiators. It has consistently created decentralized systems, such as Covid Infection Tracking Notifications, which means that they are designed to be processed and calculated on the device rather than on servers that Apple can access.
Apple relies on this reputation to assure customers that it’s Find My system will not leak user data or data when it acts as a search device. Apple claims that the Find My network keeps location data private and anonymous and does not store location data or history.
How Apple implements this depends on sophisticated software development. “Find My is built on advanced public-key cryptography,” Apple said in a statement.
Apple users will now have to decide whether they understand and trust the Find My network and Apple — both as their users and as iPhone users participating in them — to make it work better.
