Hey Apple, Google: people don't trust you any more

Yet another sign of widening chinks in the Apple [AAPL] armor today as the company loses some customer trust and a UK newspaper reveals the risks of storing data in iCloud.

[ABOVE: This iPhone case/coffee cup holder is not a real product and never was -- though some media went along with the joke.]

Safety first

Security of personal data is a big deal, after all, as our entire digital existence gets stored in the cloud those online-hosted assets can comprise our communications, our personal messages, the things we read and write, our images, videos and address books.

The risk is that in exchange for online hosting of our digital lives, consumers across all platforms aren't being given enough information to help them decide if they should use these burgeoning online hosting services.

In the UK, the Daily Mail today reports that European nationals choosing to host their data with Google, Apple, Amazon and other firms who store this info on servers hosted in the US are at risk of having their information snooped through by all manner of US agencies under the Foreign Intelligence Surveillance Act. 

While the rationale for this is to prevent terrorism, the effect is to deny user privacy. US users are, of course, protected under the US Constitution.

Despite this, some developers are already building solutions which can be used to access data thought stored safely within the cloud.

So many unanswered questions

These are big challenges. For business users security of data underpins their enterprise, driving an evolution of conversation between top tier customers and service providers. Buzz words like "data repatriation" and questions concerning the active data privacy rules governing data stored with such services are deal-breakers to CTOs seeking cloud-based solutions.

Enterprise and public services officials understand the potential for their information to be misused if accessed by others without permission or consent. Should a patient’s health data really become a data commodity to be bought and sold without knowledge or permission?

Cloud service providers know this too, though one question all incumbents in this space continue to struggle with is the determination of which data protection rules apply as data is transferred between countries. 

What protection exists if such data is transferred through Antigua on its journey en route to a data center in, say, Canada? What legal protection and security shrouds that data during those few moments when that  information is on pipelines hosted under another national jurisdiction?

Consumers aren't stupid

Apple designer Jony Ive has gone on record to describe consumers as "discerning". While he was discussing consumer response to product capability and design, it seems foolish to assume such consumer discernment stops with product choice.

Perhaps it's the growing awareness of the issues surrounding data integrity and online services which has driven UK privacy campaigners to sue Google over its abuse of Safari privacy. It is also possible consumers aren't yet convinced as to the security of data held in iCloud.

Slight evidence supporting this conjecture emerged today when the latest Ponemon Institute report claims Apple has fallen out of the list of top 20 trusted companies. Apple fell from eighth place in 2009 to twelfth in 2010, fourteenth in 2011 and 21st in 2012.

The latest data is based on over 6,000 responses: Google and Facebook are also far less trusted then they were before, the survey reveals.

Some other interesting findings within this report include:

  • 78 percent of respondents continue to perceive privacy and the protection of their personal information as very important or important to the overall trust equation. 
  • 59 percent of respondents believe their privacy rights are diminished or undermined by disruptive technologies such as social media, smart mobile devices and geo-tracking tools. 
  • 55 percent say their privacy has been diminished by virtue of perceived government intrusions. 
  • Just one third (35 percent) of respondents believe they have control over their personal information and this result has steadily trended downward over seven years (italics mine). 

Losing their cool?

This doesn't merely reflect data security. To my mind, it also reflects Apple's, Google’s and Facebook’s slow erosion as cool brands. Now the biggest tech firms in the world, all three are, or should be, open to more critical coverage than ever before. 

Meanwhile intense competition between Apple and Google over the mobile space race is driving a new partisan quality to that debate, inevitably people take sides. As this happens, the valuable connection between Apple, Google and others and their customers also erodes. 

The Apple resurrection myth has become a reality, and that transition means its judged a different way today.

Given that as smartphones and mobile devices head inexorably toward becoming commodities, as seen in the evolution of previous industries including the PC market, the focus will shift from the devices themselves and toward perception of device capabilities -- software and service, in other words.

However, if we also accept these solutions are inextricably linked with provision of cloud-based services, the Ponemon Institute’s report offers up an interesting insight which in future may make or break consumer acceptance of cloud-based services from Apple and competitors.

“Seventy-three percent of respondents believe the substantial security protections over their personal information is the most important privacy feature to advancing a trusted relationship with business or government organizations. 

“Other important privacy features include: no data sharing without consent (59 percent), the ability to be forgotten (56 percent) and the option to revoke consent (55 percent). The number one privacy-related concern expressed by 61 percent of respondents is identity, closely followed by an increase in government surveillance (56 percent).”

However, the concern for Apple and its competitors as they seek to evangelize their products and services across an increasingly well-educated consumer marketplace has to be that -- at least at present -- they appear less trusted by consumers than before.

And trust is currency in a connected age.

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