Source: Apple Inc. Apple may expand its ads to more first-party apps on the iPhone in a bid to boost revenue, according to Bloomberg The company currently generates about $4 billion in annual revenue from its advertising business, but it wants to grow the segment into “double digits,” according to the report. Apple already displays ads in some apps, such as Apple News and Stocks. It also recently announced plans to expand ads to the App Store. Bloomberg said the company is looking at ways to add ads to Apple Maps, for example, which has so far distinguished itself from rival Google Maps by not showing ads. The report said it’s “likely” Apple will also introduce in-store ads for Podcasts and Books. An Apple representative was not immediately available to comment on the report. Meanwhile, Apple has targeted other companies that push ads to iPhone users. Last year, Apple released an update to iPhones with a new pop-up asking users if they wanted to allow apps on their phones to target the user for ads. The privacy feature, called App Tracking Transparency, has upended the mechanisms behind many mobile ads, especially those that confirm whether a purchase or download has taken place. It’s clear that most iPhone users opted out, and the feature has presented major challenges to companies ranging from Snap to Facebook to Peloton. The new ads could help Apple extract more value from iPhone users. Analysts at Needham wrote in a note on Aug. 3 that they believe Apple’s next big revenue stream is advertising. “AAPL has best-in-class user data,” they said. “If it builds a DSP (demand-side platform), AAPL can control how and where its data is used and can prevent data from leaking outside its Walled Garden.” Analysts also said they believe Apple is in the early stages of creating a new mobile advertising platform. They said they have seen a “significant uptick” in the company’s recruitment efforts for its Advertising Platform, and that it was particularly visible at the Cannes Lions advertising festival in June. In Apple’s most recent earnings call, CEO Tim Cook and CFO Luca Maestri said the company’s ad business has faced some Covid-related difficulties, but Cook said it’s a “great” discovery tool for app developers who they want to promote their apps. Analysts at Bernstein said Apple’s Services business, which is driven primarily by advertising and the App Store, has slowed in growth for four straight quarters as the App Store has suffered a shift in consumer spending. However, they said they expect Apple’s ad business to grow due to higher ad loads in the App Store. “Overall, we believe growth of at least 20% for the overall Apple Advertising segment is achievable in the coming years,” they said. Read more at Bloomberg.
