Apple Finds Its Next Big Business: Showing Ads on Your iPhone

Apple needs to be very careful that they don’t erode the things that most differentiate them from their competition.

Why? With their loyal fandom, they could put ads into every part of iPhone and there would still be millions running around telling everyone how those Ads are improving their lives and Apple helped them live their life.

Ads are coming to iOS (heck, my iPad and Mac already have quite a bit peppered around) and Apple will earn even more money in the future from them.

Not on my phone or computer, and I am all in on their ecosystem. I was prepared to bail over their CSAM scanning plans and I can easily move forward with it for ads. The Pixel with Calyx is still quite functional.

I have an ethical line and it is my phone and computer are for my convenience, not a way to toss advertising toward me.

Go ahead Apple, test me. Ya almost lost me a year ago. And I am not alone in this, I think most of Apple’s user base would be quite intolerant of such a plan.

> And I am not alone in this

But you are probably one of a handful of people who would switch ecosystems over an ad for a business in Apple Maps.

Most people have significant amounts of lock-in impeding such a move.

Agree. But I believe Apple thinks they also need to move harder into "services" and, I suppose, now ads. I think Apple recognizes that the high-margin hardware business is not not sustainable. Especially as everyone who would want an iPhone already owns one. Apple needs to grow somewhere.

Before almost every startup dev in the world was on Macs, only a handful of people were using anything but Windows on the pro desktop... Macs were widely derided for well over a decade, even after OS X and the eventual Intel switch. And then suddenly there was critical mass and they kinda weren't anymore. Nobody in 1997 would've seen that coming, but mistakes that push a handful of people there and a handful of people there to new things have a way of compounding over time.

(Look at how people talk about Google today vs 10 years ago, too, for instance.)

You are very mistaken if you think Apples recent "privacy" push wasn't about taking over advertising revenue from Facebook, Google, snap and tiktok

They could have done that without a so called "privacy push", they "own" the device and if they chose to, could provide advertisers a level of targeting that the mentioned entities cannot match without resorting to privacy as a red herring

The differentiation is not in having no ads but in not tracking the user for targeted advertisements. Which is why of course next up people are going to complain about the bad quality of the ads.

I doubt they'll lower their prices anytime soon.

No, they can't provide better targeting than Google/fb. Taking out competitors makes it a lot easier to seek rent.

They are very tactical. They want to be praised as the good guys while killing their competition.

Bull.

They’re already annoying even the faithful with ads for Apple One, Apple TV+, and Apple Arcade. It’s been mentioned as garish and obnoxious on multiple relatively pro Apple podcasts.

I don’t the entire fan base would just sit there and take it. I think they’d see a strong reaction.

People always think users are more activist than they actually are. In reality, as long as something works, most users will tolerate a large amount of bullshit.

Everyone that owns an iPhone cycles them out every 2-3 years. It’s a perpetual cash cow.

That’s not true. A lot of people wait until their phone no longer works to upgrade.

And also, something being a cash cow at the moment does not mean that thing will continue to be one. Since the iPhone 6ish, iPhones have become “good enough”; there’s not much to differentiate each model from the previous as there was with, say, the iPhones 3GS and 4. The iPhone 13 just doesn’t have much going for it compared to the 12.

A privacy respecting OS on google hardware is just controlled opposition. Please don't buy a new pixel if there is any other option (and there are a few for most use cases).

Apple is still selling a million iPhones a day.

Just like when they put ads on ad-free paid for cable?

I don't think todays generation are more activist than those that came before. They fall far short in fact.

They can't compete with the big ad players and they know it. They tried. It's another classic example of "if you can't beat them, use your other enormous industry leverage to change the game to your advantage." Truth is, I don't think Apple realizes yet how critical that tracking data is to keep advertisers happy and informed. I predict that they will enter the ad market in full 3 years from now, and the existing players will push for an antitrust lawsuit in 5. If they survive that is.

That was the case, now its more like 4-5.

Then Apple is more blind than I assumed possible. Yes, their phone business is probably saturated, but their computer business is not. Apple produces the only ultra-book worthy of the name.

There is no reason for them not to own the premium-business market with all day battery, but still powerful machines. Mac runs the office suite, Mac runs your browser and Teams, Zoom or whatever your organization uses. It runs figma, it runs your IDE, etc.

There are definitely areas where they don't work, and they don't really have a meaningful desktop, and some companies will have speciality software that isn't browser based.

But in general the boss-and-above market has very little reason to not use an Apple Air.

I stopped cycling when they removed headphone jack. Back to the Android.

> Truth is, I don't think Apple realizes yet how critical that tracking data is to keep advertisers happy and informed

I think they do. Note that Apple can still track conversions on apps (gaming apps is where the money is), which basically no-one else can without getting ATT agreement. Note additionally how Apple (and Google's) business are conveniently excluded from ATT concerns (because they track installs differently).

Like the gaming advertisers on iOS have nowhere else to go now that Apple have hobbled the competition, which they tried to do with App Store ads about 5 years ago.

Likewise. I wonder if we'll ever see them restore the headphone jack on the SE models simply because there's a good 10-20% chunk of the market who won't buy a phone without one.

A Mini-chassis-based SE with a headphone jack and a touchID home button would be a day 0 buy for me -- I wouldn't even wait for reviews.

Unfortunately I think Apple's treating the headphone jack (on iOS devices) like USB-A, not like the SD card slot or the HDMI port (on the Mac) -- the backlash hasn't been strong enough for them to backtrack.

Of course, that leaves me trapped in the failed evolutionary path of my touchID, small-sized, headphone-jacked 2016 iPhone SE that's losing iOS support this fall. The Zenfone 9 has me intrigued as a modern SoC with solid cellular band coverage and most of the features I want. But it's still bigger than I'd like.

I want an iPhone but im not sacrificing my entire ecosystem of USB-C charger, batteries, car chargers, etc that i can share between my laptop and headphones to mix in lightning nonsense. When iPhone goes USB-C I'll buy.

Further, Apple will now do it's own tracking while observing privacy by keeping the tracking data inside the device [1].

It has already disabled the ability of 3rd party apps to perform tracking locally while preserving privacy by "disabling the ability of apps to share data locally within a device". If you click an Amazon ad on Facebook and open the Amazon app, Apple will not allow Amazon to report a successful conversion locally (thus preserving privacy) to the Facebook app.

However the same restriction won't apply to Apple as they are the operating system.

Note that Apple is always complaining about "privacy", not Ads. They are going to go all in on Ads.

[1] I suspect law enforcement will still be able to access the local data from the phone, so the privacy preserving tracking might not work when you need it the most.