Apple targets mobile ad revenue with iPhone 4

Apple targets mobile ad revenue with iPhone 4

The iPhone 4 is spearheading Apple’s attack on the lucrative mobile advertising market.

Launching the iPhone 4 at a conference in San Francisco yesterday, Apple chief Steve Jobs claimed that Apple will control 48% of the mobile advertising market by the end of this year through iAd. The iPhone 4 is the first iPhone to include iAd.

The iAd platform, which Apple launched earlier this year, allows app developers and Apple to make money from advertising contained within apps. Apple is offering developers 60% of all advertising revenue from their Apple apps.

Geoff Blaber, senior analyst at CCS Insight, said the inclusion of iAd on the iPhone 4 could lead to a fundamental shift in the dynamics of the mobile phone industry.

‘It could be hugely disruptive. Should iAd really start to generate revenue Apple could suddenly be in a very strong and lucrative position and it could use its revenue to lower and subsidise the price of iPhones making it less reliant on operators and much more accessible.’

He added: ‘In the long term this is the scenario the operators have always feared – that they do just become just a dumb pipe for other companies services and advertising interests.’

Blaber said Apple also had ‘first mover’ advantage over Google, which recently bought AdMob to spearhead its ambitions in the mobile advertising market.

‘There is a lot of fighting for developer mindshare at the moment and this will strengthen Apple’s position with developers. Until we see Google start to respond Apple will continue to strengthen its position in this area.’

However Blaber said Google would be a tough adversary. ‘Google know a lot about advertising and we should not underestimate them. In addition it is positioning itself as a much more open and collaborative partner than Apple. The stringent requirements which Apple typically puts on developers and advertisers may drive them to Google and Android handsets.’

However Blaber said mobile advertising is in its early stages and has yet to prove itself. ‘It remains to be seen how successful and how much revenue Apple can drive,’ he added.

Tim Shepherd, analyst at Canalys said iAd adds another dimension to Apple’s offering. He said Apple’s high end users would be particular interesting to advertisers.However he questioned how much of a threat iAd will pose to Google.

‘It is a challenge to Google but the two can’t really go head to head as they are separate eco systems. Apple has put a stake in the ground saying they are not going to outsource advertising, that they are going to control it for their own eco system and for users at the high end of the market,’ he said.

Written by Mobile Today
Mobile Today

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