With AirTags, Apple launches a new product and invites antitrust scrutiny

By attaching an AirTag to an item like a purse or a keychain, anything can be located by one of the roughly 1 billion iPhones in the world. The AirTags signal can get pickup up by iPhones connected to Apples Find My network, a software service that launched in 2019 and helps Apple users find lost devices.

Tile, founded in 2012, offers four hardware devices that can be affixed to keychains, stuffed in wallets or stuck to bicycle saddles. Tiles software is built into products like Bose headphones and Fitbit fitness trackers to offer a nearly identical localization service. But Tile says its at an inherent disadvantage to Apple, which can prioritize its own devices.

For instance, in order for Tiles products to work properly on iOS, Apples mobile operating system, users must give Tile permission to track their location at all times, and Apple took away the ability of users to select that option when setting up the app for the first time. But all Apple customers are defaulted into tracking for the Find My network during the phones initial setup.

Apple spokesman Shane Bauer said, We have always embraced competition as the best way to drive great experiences for our customers, and we have worked hard to build a platform in iOS that enables third-party developers to thrive. Bauer added that Apple would have to sell a lot of AirTags to catch up with Tile and he said Apple hopes Tile will join the Find My network.

In 2019, Apple changed its policies, making it more difficult for users to allow always-on location tracking. Around the same time that Apple launched Find My, it took away the option for iPhone users to click always allow location tracking when opening an app for the first time. But Find My is on default, requiring users to go into the settings to turn it off. Apples Find My iPhone, a feature that allows customers to locate and erase a lost iPhone, was wrapped into the new Find My app.

Around the same time, Apple stopped selling Tile in Apple retail locations, which prompted some commentators to predict the company might be moving into the tracking industry.

Tile customers also get frequent pop-up messages, reminding them that Tile has been tracking their location and prompts them to turn off location tracking. Apple customers receive no such message for the Find My network.

We welcome competition, as long as it is fair competition, Tile CEO CJ Prober said in an emailed statement. Unfortunately, given Apples well documented history of using its platform advantage to unfairly limit competition for its products, were skeptical.

Apple has said the limitations it puts on Tile and other companies that offer similar services are for privacy reasons. But some lawmakers and critics have accused Apple of using privacy as a shield for anticompetitive behavior. After Apples location tracking changes went into effect, hurting companies like Tile, Rep. David N. Cicilline (D-R.I.) said in a statement to The Washington Post that he was increasingly concerned about the use of privacy as a shield for anti-competitive conduct.

AirTags till have additional advantages over competing products like Tile. On Tuesday, Apple announced that its new devices will be able to take advantage of a new chip in the iPhone called the U1, which uses something called ultra-wideband technology. Essentially, the U1 chip uses radio waves to more precisely locate the position of another device equipped with the same chip.

Tile and other companies are prohibited from using the U1 chip. That means that AirTags could be more accurate than Tile. Bauer said Apple will allow Tile and other companies to use the ultra-wideband chip later this year.

Prober said the company would discuss Apples practices, including the launch of AirTags, at a Senate Judiciary hearing scheduled for Wednesday afternoon. Tiles general counsel, Kirsten Daru, is scheduled to testify in the hearing.

With the launch of AirTags, Apple is offering more than just a hardware device. Find My is a service that Apple could one day use to generate revenue. As smartphone sales flatten, Apple is under pressure to show it can diversify beyond the iPhone.

Wall Street has rewarded Apple for showing it can grow its services revenue into new industries such as entertainment and fitness. Despite slowing iPhone sales in recent years, Apples stock price has soared, from $1 trillion in September 2019 to more than $2 trillion today.

Rumors of Apples planned launch of AirTags swirled for more than a year before Tuesdays announcement, as Apple expanded its software offerings. Faced with regulatory pressure, Apple announced in June 2020 that smaller developers would be able to use the Find My network. That move was viewed as an olive branch to companies like Tile. But taking part in Find My came with a host of restrictions that barred participants from simultaneously working with competing networks.

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