Matt Hartley
Sun
Apple CEO Steve Jobs, speaking in San Francisco, says Apple thinks it can ‘make some contributions’ to mobile advertising. Photograph by: Justin Sullivan, Getty Images, Canwest News Service
Apple Inc., the company that brought you the indefatigable I’m a Mac advertising campaign, is taking its marketing might into the mobile world and onto the iPhone and iPad.
On Thursday, Apple chief executive Steve Jobs unveiled a series of updates to its iPhone OS software, which included the formation of a new mobile advertising network — dubbed iAd — that will deliver ads into the applications built by third-party developers and sold in the company’s App Store.
Apple said it would sell and host the advertisements, while developers will be able to keep 60 per cent of the revenue generated by the ads that appear in their applications. Apple will keep the remaining 40 per cent of the revenue.
“For a lack of an elegant way to say it, we think most of this mobile advertising really sucks, and we think we might be able to make some contributions,” Jobs said during Apple’s presentation in San Francisco.
For developers, the new iAd network opens up a new way of generating revenue from applications beyond the original sales price.
For Apple, the creation of the iAd network not only makes its application marketplace a more attractive destination for developers, but gives it a foothold in the burgeoning market for mobile advertising, setting the Cupertino, Calif.-based company on a collision course with Google Inc.
Unlike on the PC, where Google has built a sizable business by running ads beside search results, Apple believes the market for ads on mobile devices is stronger inside applications.
“Search is not where it’s at,” Jobs said. “People are not searching on a mobile device like they are on the desktop.”
Apple’s launch of the iAd network is the latest in a series of recent developments which have led to rising tensions between the two Silicon Valley tech titans as they struggle for position in the mobile market.
In January, Apple announced it had purchased the mobile advertising firm Quattro Wireless. The move came just two months after Google beat out Apple in a bid to purchase AdMob, a Quattro competitor. Apple has also sued HTC Corp., maker of the Nexus One — also known as the Google Phone — over a patent dispute.
“Although iAd takes a decidedly different approach by delivering advertising within applications instead of alongside searches and other online services, it’s as close as we’re going to get to a shot across Google’s bow,” said Carmi Levy, an independent technology analyst in London, Ont.
“These two companies are increasingly butting heads in the mobile hardware and services space, and iAd ups the ante significantly.”
It remains unclear whether Apple will allow third party ad networks, such as Google’s AdMob, to continue to serve ads to applications which run on iPads and iPhones, said Josh Martin, a technology analyst at Strategy Analytics in Boston.
© Copyright (c) The Vancouver Sun
