Apple vs. Android: Pick Based on How Much You Value Privacy

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Woman using mobile overlooked by wall graffiti
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This past week at the annual Google (GOOG) I/O conference it was disclosed that there are almost a billion users on the Android operating system. By comparison, Apple (AAPL) recently announced that it has sold more than 800 million devices equipped with its iOS operating system, though there might be more active users.

If you are one of these people beholden to Google or Apple for your smartphone, tablet or laptop's operating system, you need to ask yourself as an informed consumer this question: How much are you willing to trade for access to your personal information? The answer will determine which tech giant you align yourself with.

Apple's Closed System

Apple prides itself in producing high-end devices with a closed operating system. You pay up for its products, and you are assured a certain level of privacy.

The company put its money where its idealistic mouth is with the recent update to the iOS 8 mobile operating system which makes Mac addresses private on mobile devices. This makes it impossible for retailers to identify people via Wi-Fi from their iPhone, something previously done on a regular basis, without your knowledge, whenever you entered many stores.

This move follows a previous decision not to allow cookies -- the supposedly anonymous programs that track your browsing history –- as the default option for the Safari browser in the iOS and OS X devices.

Apple has the luxury of doing this because it makes money the old-school way -- by selling products and a lot of them. Between computers, phones, music, TV shows and movies, Apple has sold more than $171 billion of real stuff over the last year.

Google Wants to Optimize Ads, Ads and More Ads

Google, on the other hand, is in the business of selling ads. Ads need your personal data to optimize and target them –-allowing Google to charge the highest ad rates. To do this, Google offers almost all its core products for free" Google Search, Gmail, Google+, Google Maps, Chrome and You Tube. And the Android system itself is open source, available for independent developers to build upon.

But as they say, there is no such thing as a free lunch. The price you pay for paying no price with Google products is that it is free to take your personal data, preferences and browsing habits and give them to advertisers to target you.

If you don't believe me, try this for an experiment. Send a few emails to your friends through Gmail talking about how much you would like to learn to bowl. Within a few days to a week, you will start seeing the ads that populate the right-hand side of your Gmail screen miraculously coming up with discounts to your local bowling alley or courses on improving your game.

Type "vacation cruise" into Google search on your Chrome browser, and you will find digital ads for Carnival (CCL) and Princess Cruise lines following you across all the web pages you visit.

Even Google glasses are designed to accumulate data on the user's habit and feed it upstream to Google's servers.

Differing Revenue Models

To be fair, Apple tracks customers in its own stores and in select retailers with iBeacon via a phone's Bluetooth connection, but the customer has to opt in through an iBeacon app first. In addition, the technology is designed more to alert consumers of sale items and offers in the immediate vicinity they are shopping in, opposed to tracking their info and data for ad-related revenue.

In today's technological age, it would not only be naive but irresponsible to frame Apple and Google in terms of good or bad companies. However, it is important for consumers to understand the difference between the two -– in terms of how their business and revenue models work -– to make an intelligent and informed decision on which to patronize based upon how much you value your privacy.

Brian Lund's blog offers more on personal finance, the stock market, investing and the secret to eternal life.

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