The big question after CEO Mark Zuckerberg announced Facebook’s “pivot to privacy” was whether the company was really sincere about guarding users’ personal data. (The consensus among critics: probably not as serious as you might hope.)
What does seem sincere, however, is Zuckerberg’s newfound commitment to messaging. He wants Facebook to dominate private online communication to the same degree that it dominates what we call social networking today.
When people pull out their phone to text their mother, or plan a party with a group of friends, Zuckerberg wants them to do that on WhatsApp, Messenger, or Instagram Direct—all of which will work with each other, and eventually with standard SMS systems, too. And in the long run, he wants them to use those platforms for much more than texting and chatting. The ultimate vision is something akin to WeChat, the Chinese super-app that people use for everything from messaging to sharing videos to making appointments, reviewing restaurants, and hailing rides.
To accomplish that, however, Facebook will have to accomplish something no one else has yet been able to do: pull iPhone users off of iMessage, Apple’s enormously popular and user-friendly messaging platform. Ultimately, Facebook wants to build a whole suite of messaging-based services that would compete with popular iOS apps. That goal puts Facebook, for the first time, in direct competition not only with Snapchat, Google, and Twitter, but with Apple.
It could get ugly.
For years, Facebook and Apple offered largely complementary products. People bought iPhones, downloaded Facebook and Instagram, and spent large chunks of time on those social networks, while using Apple’s native apps for calling and texting. Facebook made money from the targeted ads in people’s feeds. Apple made money on the hardware, while its software kept users loyal (or locked in, depending on your perspective).
IMessage in particular—with its user-friendly interface and end-to-end encryption—has been a bulwark for Apple to keep people from switching to Android devices. It isn’t an accident that Apple has never built an iMessage app for Android phones, even though demand for it is high. Google, for its part, has struggled to build a successful messaging product, which is why many Android users have turned to Facebook Messenger and WhatsApp.
The recent slowdown in iPhone sales, however, has Apple looking to make more money on software, subscriptions, and payments. At the same time, the plateauing popularity of the main Facebook app has Facebook eager to invade new arenas. And so the giants have been circling each other warily, with Apple CEO Tim Cook jabbing Facebook over privacy failures, while Zuckerberg has hit back over Apple’s presence in China. The tensions boiled over in January, when Apple cut off Facebook’s special developer access after TechCrunch reported that a Facebook VPN app had been flouting Apple’s rules.
The clearest sign of the coming battle, in retrospect, came in October, on a Facebook earnings call. In a comment that passed with surprisingly little notice, Zuckerberg called Apple’s iMessage “our biggest competitor by far.” He went on: “In important countries like the U.S. where the iPhone is strong, Apple bundles iMessage as a default texting app and it’s still ahead.”
At the time, it sounded like hyperbole: Surely Facebook’s biggest competitors were Snapchat and YouTube, not iMessage. But it wasn’t hyperbole: It was a hint that Zuckerberg was already thinking about private messaging as his company’s future and recognized iMessage as its greatest obstacle.
Near-global dominance of messaging is not as far-fetched a dream for Facebook as it might seem to the average American. WhatsApp is already the most popular messaging app in many countries outside the U.S. and China, including Brazil, India, Mexico, Germany, and Turkey. Messenger is close behind and has become the default messaging app for many Android users in North America.
One market where Facebook seemed to stand little chance is China, where WeChat already does all the things Zuckerberg dreams of doing, and more. That surely made it easier for Zuckerberg to announce in his privacy manifesto this week that Facebook will not build data centers in oppressive countries—a strong hint that it’s giving up on the Chinese market.
That move makes it all the more apparent that Facebook sees its path to growth blockaded by Apple and iMessage, especially in the United States. And it gives Zuckerberg fresh ammunition to fire back at Apple anytime Cook criticizes him on privacy. If Apple really cared about its users’ privacy, he’ll say, it would follow Facebook’s lead in refusing to store data in China, whose government has a record of demanding access to users’ information.
Nonetheless, Cook is sure to put up a fight. The analyst Ben Thompson makes a persuasive case that Apple’s struggles in China—the main culprit in its iPhone slowdown—are due in large part to WeChat’s dominance there. With WeChat taking over many of the key functions of iOS for Chinese users, including messaging, Apple lacks the software lock-in that it enjoys in much of the rest of the world. As a result, Chinese users feel little loyalty to Apple products and have no trouble trading in an iPhone for an Android device.
Messaging will be the initial front in this contest, but it won’t be the only one. The New York Times reported last month that Facebook is developing a cryptocurrency to enable instant payments within WhatsApp. That will put it in competition with Apple Pay, as well as Venmo and others. Zuckerberg didn’t make clear how Facebook would monetize its push into private messaging, but payments, marketplaces, and e-commerce would be a logical approach.
If Facebook were to succeed in becoming the WeChat of the rest of the world, then Apple’s business outside China would start to look a lot more like its business inside China—which is to say, weak. So it’s critical for Apple to find ways to block Facebook from achieving that. Its crackdown on Facebook over the VPN app looked like a warning shot, but it may have also been a show of force that foreshadowed the drawn-out conflict to come.