Why Mobile Providers Will Have to Give a Little on Privacy

Apple has tossed out some hints that its App Store may soon accept apps that handle digital currencies such as bitcoin. The change would represent an about-face for the company, which famously has banned virtual currencies from its domain, to the dismay of bitcoin fans.

The reasons for Apple’s reversal are myriad: The appeal of bitcoins is such that it can’t afford to ignore digital currencies anymore; Apple wants to get ahead of this wave and really, truly and finally disrupt e-commerce and mobile commerce on its own terms; third-party developers have been pushing hard behind the scenes for this change.

There’s also this little tidbit — and the larger conclusion that it represents — that could have something to do with its decision. PornHub last month released an analysis of its 38 million daily visitors, which included the interesting observation that more than half were using mobile devices like tablets and smartphones.

The Porn Factor

For some reason, Chrome leads desktop porn-watching at 44.4 percent, while Safari leads with mobile, at 38.2 percent. Safari leads as well among tablets, at 73 percent.

It is not clear whether Apple’s rule change is such that bitcoin will be accepted for in-app purchasing, but a little exercise in connecting the dots leads to the conclusion that it’s not far off.

Many people may be reluctant to have their porn-viewing habits associated with a payment history that could be accessible to creditors and family members alike. Apple recognizes that bitcoin adds a measure of privacy that is almost completely absent online — and that is becoming increasingly important to many mobile device users.

Ever since former National Security Agency employee Edward Snowden’s revelations began to surface last year, privacy has been the subject of world debate. Making things more interesting, the U.S. government appears to have gone from defense to offense on this subject, by pointing out the many, many, many factoids data brokers and companies are able to collect about their customers and future customers.

The Federal Trade Commission recently released a report showing how data brokers grouped consumers based on race, income, hobbies and medical conditions. Consumers were being profiled and filed away in such categories as “dog owner,” “expectant parent,” “diabetes interest,” and “urban scramble,” which apparently has to do with race. Nice.

My Mobile Device, Myself

It is only natural that with their stepped-up interest in securing just a small piece of anonymity for themselves, consumers would zero in on their mobile devices.

As marketers realized almost immediately, smartphones are integral and almost intimate extensions of the consumer, in a way that a desktop or laptop PC never will be.

That is why Silent Circle last month raised a rather astonishing US$30 million in new investment capital to meet what it characterized as “overwhelming demand” for its Blackphone — a secure mobile device.

“Privacy has become a worldwide issue,” Silent Circle CEO Mike Janke recently told Venture Beat. “People want it and are willing to pay for it. VCs follow profit, return on investment, and the next big wave. They are smart folks.”

Count Apple among the smart folks. Apple is realizing it will have to give a little on privacy if it doesn’t want to lose everything to the people and products that really can offer true anonymity. Hence the nod to bitcoin. Other mobile providers will soon follow its lead.