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Apple is Creating a Social Network to Destroy Facebook


The recent headlines surrounding Facebook make it abundantly clear that this bastion of innovation is pushing hard to reach the final frontier of its social media goals. While Facebook has the largest audience in the world, it lacks one of the three pillars that make a perfect advertising platform, and that pillar is timeliness.

For all of Twitter's failings, it still, perhaps in spite of itself, is the dominant player in real-time communiqués. It is the connector of all things and people related to real-time events. In fact, it's a fair argument to make that Twitter's devotion to that core competency has made it overly pedantic and difficult to navigate for new users which has hurt the company's growth.

Facebook and Google see the singular pillar held by Twitter, and Facebook is attacking with absolutely all guns blazing. What we'll read in the headlines and the superficial news stories is that Facebook is pursuing the obvious strategy to take control over online video -- a thematic shift that is beginning to dominate the social vernacular.

In fact, here are the most visited video sites and then a chart which shows the rather explosive revenue being drawn from ads. Both charts come from our friends at Statista.

And now the revenue chart:

But, what you will not read is the reason Facebook is pushing so hard into real-time. Facebook sees Google and Twitter cozying up. But friends, the only thing that really bothers Facebook, at least publicly, is the singular material risk they mentioned in the last earnings call. Mark Zuckerberg called it ad blockers, which are growing rampantly if not virally.

But what he really meant was something much more dangerous and much more specific. When we see it, we may not believe it. People will say it's a ruse. It's a distraction. It's make believe. But it's none of those things. Friends, Apple is creating a social network that aims to destroy Facebook and we have the patent filings to prove it.

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We'll start with Facebook's recent moves and then show you the renderings and some bullet points from the United States Patent and Trademark Office (USPTO) in a filing from Apple, Inc.

Here is recent news from Facebook -- it's an aggressive venture:

Facebook has devoted significant energy and resources to its Live video streaming platform, and it has now debuted several new features for the service.
Users can now broadcast to Groups and Events, share and invite friends to live broadcasts, use interactive features such as Reactions and filters, and use a Video tab that serves as a standalone content discovery platform similar to YouTube.


If you keep reading the headlines and news snippets that are popping up everywhere, it almost feels like Facebook has gone frantic. Recall this from January 21st:

Facebook has devoted significant energy and resources to its Live video streaming platform, and it has now debuted several new features for the service.

Today we're launching the Facebook Sports Stadium, a dedicated place to experience sports in real-time with your friends and the world.

Source: Facebook

Further yet, Facebook appears to be "copying Snapchat" for many features, from real time photo filtering to a scannable phone number for the app. And for the record, it's working.

Facebook announced that Facebook Messenger grew to 900 million monthly active users, up from 800 million in January. But, put all that aside now. Here is the threat:

Recent filings with the United States Patent and Trademark Office (USPTO) reveal that Apple looks to be forming a social network to compete directly with Facebook. We start at the beginning.

This February, Eddy Cue, the head of Apple services, revealed that Apple's iMessage peaks at 200,000 messages a second. For reference, if that peak lasted year-round, we're looking at 63 quadrillion messages (Source: Business Insider).

Of all the successes Apple can point to, why would they hype their message rates?

The news from Cue was amazing, but also out of left field. Cue's Apple services is exploding right now, but iMessaging has hardly been a focal point. Here's the revenue growth from Services alone via Statista:

Find more statistics at Statista

If Eddie Cue gives an address, this overall growth in services is what we would expect the story to focus on, and for good reason. But this has very little to do with iMessaging.

That's why the focus on iMessaging, all of a sudden, caught our attention and this is where it starts to get really interesting.

We did some digging on recent Apple applications to the USPTO, and what we found was shocking.

An abstract from a filing with a publication date of May 7th, 2015, reads (emphasis added):

Techniques for lifestyle-based social groups are described. The system can create a social group based on lifestyle and the meaning of location.

The social group can be an ad hoc social network.

But it's the body of the patent that truly blew us away.

Patent applications are intentionally complex and obfuscated. Fortunately, we've done the work to distill it down to the most critical elements directly from the Source: United States Patent and Trademark Office:

First, from the patent (emphasis added):

On a social network website, people can post information about themselves. [] However, this information may not be sufficient to determine a person's everyday lifestyle.

The social groups can be based on similar activities and interests of members, even if the members do not post the activities and interests on a social networking website.

And this image:

To start, we already see that Apple's patent demonstrates how "social groups" can be automatically formed by tracking existing users who go to the same restaurants and grocery stores.

With this alone the implications would be staggering, but then this takes it to a whole new level:

Yes. Apple is automatically forming social networks. Incredibly, these first two images are trumped by what else Apple disclosed.

We combine this patent filing with the information just learned about iMessaging rates and it becomes rather apparent that Apple is about to launch a social network for everyone that carries an iPhone -- automatically.

Apple is going directly after not just Facebook's Messenger, and Facebook's WhatsApp, with 1 billion users, but positioning itself to directly compete with a shocking range of companies.

But the waves created by this go further, still. Facebook, like most social networks, has struggled with the perception that its users have only superficial interactions, that a "Facebook friend" is simply a vanity-voyeurism benchmark.

Apple's "real world" network combined with consumer patterns and behaviors could put Apple in a position of unprecedented influence. Facebook, Google, Twitter and even Uber: watch out.

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Thanks for reading, friends.

The author and the author's household hold shares in Apple as of this writing.

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