For example, encrypted data can't be compressed. Columnar big data systems rely heavily on that to be performant.
They have huge incentives. Apple is positioning themselves as the privacy king. Meta has suffered huge losses because of their privacy abuses. Neither of these suggest no incentives. I'd argue that they suggest large incentives.
The technical downsides are a fair critique though. But this also is where competition excels. Our machines are getting faster. Other algorithms have also gotten extremely faster and it would be naive to assume that homormorphic algorithms similarly don't. This is why I say an arms race.
Apple know what they need to do to be successful, and that's continue to release updates to the iPhone that in a few small ways make it slightly better than the previous one.
I am willing to bet that it is a deal breaker only for very small minority of users. I would argue that search engine data is of much bigger privacy concern than OS, as compared to search history no OS action comes close in disclosing personal action, and google/bing almost has universal market presence even for Apple users.
> Meta has suffered huge losses because of their privacy abuses.
They had their revenue reduced, true. But it is not loss. They wouldn't be in any better position if they didn't used extra data when it was available.
An iphone user is _probably_ tracked by less ad agencies than a stock android user, but that’s it.