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To clarify the possibly misleading headline:
Most “privacy policy” statements amount to “you have no rights and we’ll do anything we want with your data, if you want privacy then don’t talk to us”.
Apple is deeply integrating strong encryption into every form of user’s data, making it nigh unto impossible (insofar as it isn’t, their goal seems to make it) to extract any information not actually needed to carry out a specific task, limiting any ability to extrapolate that data into something more invasive.
It’s not so much that “Apple is blowing up the privacy policy” as “Apple is actually implementing a real & effective privacy policy”.