Analysts disagree on impact of Apple's iAd endeavors
updated 01:25 pm EDT, Fri April 9, 2010
Announcement ignites rivalry with Google
Apple's iAd announcement, which was included in the company's iPhone OS 4 event, has lead to disagreement among analysts. On the lighter side, Kaufman Bros. analysts expect iAd to have only "minor to negligible" impact to Apple's bottom line, as it is viewed simply as a service to allow developers to make more money from free apps.
Citigroup believes the initiative will "meaningfully spur" app development on the iPhone platform, although the group admits that it is too early to assess the financial impact. A material contribution is nonetheless forecasted sometime within the next 18-24 months.
Piper Jaffray expects in-application advertising to reach $700 million by 2013, with the iPhone accounting for $500 million. The analysts place Apple's market share on the iPhone platform at $380 million, a 77 percent market share, as competitors such as AdMob will continue to compete.
"We believe mobile advertising could drive the proliferation of even more premium games and content available for Apple devices and even allow the iPhone to become more of a device that drives commerce based on user preferences," said Barclays Capital analysts. "We believe this could be a multiple billion dollar business for Apple within the next few years."
Broadpoint.Amtech agrees with the bullish forecast, confident that the platform is capable of generating approximately $2.5 billion in revenue when it "hits its stride." The analysts caution investors that the numbers are based on "numerous assumptions," however.
The iAd system will be similar to many of the other advertising platforms on the iPhone. While existing options require users to exit to Safari after clicking on an ad, Apple's content will be presented directly from within the original app. An emphasis on HTML5 will allow publishers to integrate rich content such as photos, videos, mapping functions, or even games. Developers will take 60 percent of the revenue, with the remaining 40 percent cut going to Apple. [via Wall Street Journal.
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While existing options require users to exit to Safari after clicking on an ad, Apple's content will be presented directly from within the original app.
Nothing like forcing out the competition by giving your service additional benefits.
An emphasis on HTML5 will allow publishers to integrate rich content such as photos, videos, mapping functions, or even games.
Everyone will love this! The same ads as before, but now not bloated flash annoying you, but HTML5!
Developers will take 60 percent of the revenue, with the remaining 40 percent cut going to Apple.
Talk about sweet. Apple does a little work on its end and gets a hunk of change in response.