The big picture: The world’s most valuable company appears to be expanding its advertising business for further revenue growth. By introducing ads in more pre-installed apps on iPhones and iPads, Apple plans to significantly boost its current $4 billion in annual revenue to “double digits.” The move could upset iPhone users who already pay a premium for Apple’s tightly integrated hardware and software experience.
Apple’s current implementation of ads on iOS is fairly limited, including Search Ads on the App Store as a way for developers to promote their apps, and in the first Ads in Ads – party stock and news app. Oddly, the latter even serves ads to News+ paid subscribers, although this is a minor issue with the overall iOS experience.
However, it now looks like Apple’s advertising strategy is picking up steam, as the company is planning to significantly increase its advertising strategy by expanding advertising to new locations on the iPhone and iPad annual advertising revenue.
According to Bloomberg, potential candidates for these ads include Apple Maps, book and podcast apps, and even an ad-supported TV+ tier. The App Store will also soon get more ads in the app’s Today tab and in the download pages of third-party apps.
As for Apple Maps, search-based advertising has apparently been tested internally, which appears to follow a Yelp-like implementation that allows paid businesses to rank high on local listings. For Apple Books and Podcasts, users can see sponsored publishers/authors appear higher in search results and appear in ads in other areas of these apps. Meanwhile, Apple TV+ could follow Netflix and other streaming rivals by offering ad-supported, cheaper tiers with less content.
The Bloomberg report also highlights Apple’s privacy-focused App Tracking Transparency, and how Cupertino’s implementation of the feature has dramatically impacted third-party businesses and developers’ revenue . While the latter have had to rethink their advertising strategy as iPhone users tend to opt out of cross-app tracking, it could leave Apple’s advertising business an unfair playing field that could spark some backlash in the future Monopoly Litigation.
Apple’s potential advertising expansion into the iOS ecosystem could also lower prices for the iPhone brand, as users tend to pay more for clean, unobtrusive experience. In addition to paying for many of Apple’s existing apps and services, having to see ads on more of the company’s first-party apps could make it harder for Apple to justify the iPhone’s high price point.
