The big picture: The most valuable company in the world right now appears to be expanding its advertising business for further revenue growth. By introducing ads in more pre-installed apps on the iPhone and iPad, Apple plans to significantly bump its current annual revenue of $4 billion into the ‘double digits.’ The move is likely to upset iPhone owners who already pay a premium for Apple’s tightly integrated hardware and software experience.
Apple currently has a fairly limited ad implementation on iOS, comprising Search Ads on the App Store as a way for developers to promote their apps, as well as ads inside the first-party Stocks and News app. Weirdly, the latter even serves up ads to paying subscribers of News+, though it is a minor issue in terms of the overall iOS experience.
However, it now looks like Apple’s ad strategy is kicking into high gear, as the company is planning a significant increase in annual ad revenue with an expansion of ads into new places on the iPhone and iPad.
According to a Bloomberg report, the potential candidates for these ads include Apple Maps, Books and Podcasts apps, and even an ad-support TV+ tier. The App Store is also getting more ads soon in the app’s ‘Today’ tab and within download pages of third-party apps.
As for Apple Maps, search-based ads have apparently been tested internally, which seem to follow a Yelp-like implementation that allows paying businesses to be ranked at the top of local listings. For Apple Books and Podcasts, users could see a sponsoring publisher/author show up higher in results, as well as appear in ads placed in other areas of these apps. Apple TV+, meanwhile, could follow the likes of Netflix and other streaming rivals for an ad-supported, cheaper tier with less content.
Bloomberg’s report also highlights Apple’s privacy-focused App Tracking Transparency, and how Cupertino’s implementation of this feature drastically affected revenue of third-party businesses and developers. While the latter have had to re-think their ad strategy because iPhone users tend to opt-out of cross-app tracking, it potentially leaves an unlevel playing field for Apple’s ad business that might spawn a few antitrust lawsuits down the road.
Apple’s potential ad expansion for the iOS ecosystem could also risk cheapening the iPhone brand, where owners tend to spend more for a clean, unobtrusive experience. On top of paying for subscriptions for many of Apple’s existing apps and services, having to see ads on more of the company’s first-party apps will likely make it harder for Apple to justify the iPhone’s premium price point.
Source by www.techspot.com