Apple's Week: iCloud security scrutinized, a new low-cost iPhone, and more

Apple faced intense scrutiny this week on topics as far-ranging as security to iPhones.

This week started with talk of Apple’s security efforts on iCloud backups—digital repositories for text messages, app data, and other information that iPhone users store in the cloud—and whether the company can hand over unencrypted user data to the FBI. The quick answer: It can. And in interviews with Fortune, security experts said Apple should do better.

Meanwhile, newly revealed data revealed Apple is ramping up its U.S. lobbying efforts, but the reasons why are still unknown. And the company’s efforts at stopping apps from tracking users seems to be working. According to a new report this week, an increasing number of iOS users are turning off location-tracking in apps, thanks to a new feature that gives them more control over when, and how, apps track them.

But it wouldn’t be a week in Apple headlines without talk of new hardware, like a budget-friendly iPhone. And in a surprising move, Apple is making a major push into the gym market with new Apple Watch agreements. Here are the details:

Apple’s iCloud backups

Apple abandoned plans to use end-to-end encryption in iCloud backups two years ago, Reuters reported this week. In the case of photos and content that stays on a device, end-to-end encryption only allows the device’s owner to access it. In messages encrypted from end to end, only the sender and recipient can unlock it. Because iCloud backups aren’t encrypted in that way—but are encrypted in Apple’s cloud, so hackers can’t easily steal the information—the company has the ability to decrypt data and give it to law enforcement when presented with warrants. The revelation that Apple changed its plans came days after Donald Trump and attorney general William Barr publicly criticized Apple for not handing over data stored on two iPhones owned by Mohammed Alshamrani, who allegedly killed three people at a naval air base in Pensacola, Fla. Experts expressed their concerns to Fortune that Apple isn’t doing all that it should to safeguard its customers’ data.

Tracking is on the downswing

Location Sciences, a company that uses location data to inform marketing campaigns, told Fast Company this week that the number of iPhone apps tracking a user’s location in the background is down by 68% compared to last year. Background location tracking occurs when apps aren’t in use, but are still tracking a person’s movements. Location Sciences attributed the drop to new notification features in iOS 13 that allows users to decide whether apps should be allowed to track their locations behind the scenes. Foreground location sharing, which happens when the app is open, is down 24% compared to last year, Location Sciences said.

Get ready for a new iPhone

Apple has asked suppliers to start producing a low-cost iPhone in February, Bloomberg reported this week. The planned device will resemble the iPhone 8 Apple released in 2017, complete with a 4.7-inch screen and a Touch ID fingerprint scanner instead of the Face ID facial scanner used in the company’s latest smartphones. Apple could unveil the new iPhone in March. Pricing is unknown.

Apple TV Plus’s big numbers—and big problem

Apple TV Plus had 33.6 million active users at the end of 2019, market researcher Ampere Analysis said this week, describing it as more popular than Hulu and Disney Plus. But there’s a problem: the researcher said that the “vast majority” of those subscribers are getting it for free. That’s largely because Apple has been giving a free one-year Apple TV Plus membership to customers who buy its hardware. The move is designed to help Apple TV Plus attract users. But it could also backfire: Apple TV Plus has a rather anemic content lineup, and after free memberships are up, there’s no telling whether users will sign on to pay $4.99 a month to access the service.

Apple Watch Connected hits the gym

Apple announced a partnership this week with four fitness chains—Basecamp Fitness, Orange Theory, the YMCA Twin Cities, and Crunch Fitness—to promote a new “Apple Watch Connected” program. The four fitness chains Apple selected as launch partners agreed to use Apple Watch apps to let users log in to their accounts, track their fitness progress, and sign up for classes. Apple said additional gyms will join the program in the future.

Apple boosts lobbying spend

Apple increased its lobbying spending last year, according to data compiled by MarketWatch. In 2019, Apple spent $7.4 million lobbying the federal government, up from $6.7 million in 2018. The report didn’t say what Apple is lobbying the government on, but Apple CEO Tim Cook has spent considerable time in the past year lobbying Donald Trump to limit tariffs on iPhones, Macs, and other devices Apple produces in China.

One more thing…

Apple is quietly planning to build a podcast network focused on shows that would act as companions to existing Apple TV Plus series, like The Morning Show and For All Mankind, Bloomberg reported this week. No shows have been announced yet, and it’s possible Apple could shelve the idea, according to the report.