Why Apple Is Losing The War For Online Identity

Apple could be an indomitable force in identity, but Gigya CEO Patrick Salyer believes Apple's stubborn ideology is preventing the company from entering the fray.

Online identity has evolved tremendously over an extremely short period of time. Early on, your email address was your identity—you registered on a website, created a password, and maybe entered other details depending on the site, like your home address. Then came technologies like Microsoft Passport, which united online identity but, while a great idea, was too far ahead of its time to garner significant adoption. Eventually Facebook came to market and introduced the concept of social identity.

Image: Flickr user Mark Jensen

Other platforms, including Twitter, LinkedIn, and Google followed suit, opening up their interfaces to third-party sites. Despite competition from these popular networks, Facebook is still the leading social identity provider, in part because it was first to market, and also because it adds the most value for users when they log into sites and apps through integration with social plugins. Additionally, with its breadth of user data, Facebook login enables powerful personalized marketing, making Facebook identity particularly attractive to marketers.

More recently, we’ve seen a fascinating trend emerge around authentication. The lines between identity providers like Facebook and the authentication services used in online payments have typically been starkly drawn. But those lines are now blurring—authentication players are getting into payments and vice versa. Facebook is bolstering the amount of credit card info it retains through its recent acquisition of WhatsApp. Google has been pushing Google Wallet for years. And PayPal recently partnered with Samsung to implement fingerprint identity for payments.

There is an all-out war for identity among the biggest and most successful tech companies in the world. But there’s one more player who has yet to enter the fray and could largely own online identity: Apple.

Apple’s Stubborn Ideology

There’s a great deal of talk about the direction Tim Cook is going to take Apple over the next few years. The company’s latest figures show that profits continue to fly for the iPad and iPhone, and now the world is looking for Apple’s next big move. Attention has been focused on the buzz around its foray into the connected car and into wearable tech to rival Google’s Glass, not to mention the bevy of smart watches and wristbands on the market. While wearable tech is an intriguing emerging space, it’s table scraps compared to the opportunity Apple has with identity.

Not only does Apple have one of the biggest caches of credit card information of any company in the world, it also has a unique understanding of its customers. It knows how you browse across your iPhone, what apps you use, and, of course, your shipping address. And it has done all this while routinely ranking as one of the most trusted and favored brands in the world.

All these factors indicate that Apple could be an indomitable force in identity, but the company has yet to enter the fray. For example, Apple ID still isn’t offered as a third-party authentication option.

Frankly, given the potential for Apple in this field and at this stage, it’s absolutely mind-boggling that it hasn’t yet made a move. And while the announcement of CarPlay is encouraging, Apple could stand to gain much more if it rolled out identity to the rest of the world, particularly by leveraging the company’s thumbprint scanning on the new iPhone 5s.

Image: Flickr user Kārlis Dambrāns

Imagine being able to go to a website on your desktop and, via Bluetooth, pressing your thumb to your iPhone or iPad to authenticate and purchase on an e-commerce site, with even more ease than PayPal and Samsung’s new venture.

There would be no need to register, enter credit card info, or even type a single character. In fact, the implications are far more wide reaching than that. Apple ID could become the standard for authentication on all web-based devices, allowing consumers to register and login on media sites and apps or pay for goods in-store or in-app—all powered via the very same IDs you use when you pay for apps on your iPhones or buy songs on iTunes. By tackling identity, Apple could own a huge piece of an e-commerce market that will reach $440 billion by 2017, as well as an m-commerce market that is poised to grow to well over $100 billion by the same time.

The company has an amazing opportunity on its hands, but it’s being held back by stubborn ideology.

Apple has always been something of a "walled garden" company. It develops everything in-house, and it encourages people to visit its sites, use its phones, its hardware, and its software with the promise that everything will "just work." Apple has become one of the world’s most valuable, envied, and trusted brands. However, the level of control that Apple exerts and the strict ideology it adheres to may now be getting in the way of the next stage of its business.

Other authentication and payments providers have been working furiously to own identity, each finding new ways to become the preeminent consumer identity on the web. Tim Cook and the leadership at Apple need to ask themselves: “At what point does this kind of dedication to ideology stifle our business opportunity?”

If the company opens up Apple ID by making its programming interface available to developers, it could take a foothold in consumer identity. The company simply has far more to gain than it has to lose. Identity is a green rain forest for Apple—it’s time to see the world beyond the walled garden.

[Image: Flickr user Synthesis Studios]

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5 Comments

  • I, for one, am happy Apple is not getting into this field. We've trying to tackle the issue of internet identity for a long time, however as some of the users pointed out below, it's damn tricky!

    We hoping an optional internet identity might sometime take place, however only time will tell. Read more and verify yourself at bluecheck.me

    Thanks for the article!

  • Do you actually understand what it takes to be a payments company? How much do you think PayPal makes in Gross Margin (not revenue) for every credit card dollar they process on, say, BestBuy.com? And for that penny, do you fully appreciate the cost of managing and servicing both merchants and consumers?

    I think Apple is much, much smarter than the pundits who think they know what payments are about.

  • Todd Ruel

    I totally agree. For Apple, there's nothing even remotely interesting about being an identity provider. They create and innovate in a completely different world.

    Was this article originally published in Business Insider or The Motley Fool? That's where I expect to find laughably off base punditry like this.