By showing more and more ads to its users, Apple will try to compensate for the decline in smartphone sales, which in recent years has become the manufacturer’s main source of income. However, this may cause dissatisfaction among consumers and antitrust regulators.Ads contribute to Apple’s revenues
There is a side of Apple that is almost unknown to most iPhone owners. The company is not just a top-notch manufacturer of computers, phones and electronics. Advertising is increasingly taking place in its activities, and this direction is getting stronger every day. The company, which has been selling ads on Apple News and the App Store since 2016, has started to enter an industry dominated by Google, Meta and Amazon more decisively in recent months.
In June, Apple expanded the ways to pay for ads on the App Store homepage. In August, the company posted a job posting stating that its advertising platform will be largely automated. In early October, news began to surface that the manufacturer was looking for advertisers for Apple TV+, but it was not yet clear whether the ads on the platform would be presented in a YouTube-like or TV-like format.
Apple users will see more ads
Unfortunately, there’s no doubt that those using Apple’s services will see more ads and the company will be a direct competitor to other tech giants like Google and Meta here too. Innovation in the smartphone market has almost stalled and demand has fallen accordingly, so it makes sense for Apple to try to find new revenue streams. It’s possible that this move was inspired by the experience of Amazon, which started showing ads in search results: the trading platform’s business has grown tenfold since 2016, reaching $31 billion in 2021.
On the other hand, according to the calculations of Insider Intelligence, Apple makes about 4 billion dollars a year from advertisements. However, this move may cause justified indignation from fans of the company, who have been overpaying for premium products and services for decades. Because the company’s president, Tim Cook, stated that advertising-based business models directly violate user privacy.Apple’s latest advertising initiative has caught the attention of antitrust regulators, who suspect that iOS’ new privacy policy is an attempt to harm rivals: The company’s mobile device users now decide for themselves whether they allow platforms to track their preferences. Meta estimates that it will lose $10 billion this year alone because of this decision alone.
Apple will benefit if it opens its own search engine
Peter Newman, director of Insider Intelligence, believes the company wants to reduce its reliance on device sales. Apple Music and Apple TV+, available only with a paid subscription, may be suitable advertising platforms. And Apple TV+ remained one of the few big players that didn’t offer low-cost plans with ads like Netflix was prepared to do.
However, the expert states that the company is unlikely to reach the level of Google and Meta, which reported $210 billion and $115 billion in ad revenue, respectively, last year, but rather like the $10 billion Microsoft. But if the rumors are true and Apple launches its own web search service, things may change.
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