Apple Finds Its Next Big Business: Showing Ads on Your iPhone: To find its next significant source of money, Apple plans to extend adverts to additional parts of your iPhone and iPad. Additionally, the corporation slows down the rate at which it acquires startups, and Peloton makes significant changes. Apple’s postponement of Stage Manager and iPadOS 16 kept the iPhone 14 in the spotlight last week in Power On.
I need to address the big issue at hand, which is how Apple Inc.’s privacy initiatives have prevented third-party advertising on its platform before I even begin to discuss how the company may grow its advertising business. Apple introduced a function called App Tracking Transparency, or ATT, last year. Customers may choose whether apps can track them across other websites and applications, which is a crucial tool for marketers to collect information and subsequently deliver better-targeted adverts. Typically, an advertisement will make more money the better it is.
I can’t criticize Apple for implementing the functionality because it is entirely acceptable. The decision to be tracked should be up to the user. There is no doubt, however, that ATT’s actions have resulted in significant revenue losses for both large and small businesses. You might not feel too sorry for social network behemoths like Meta Platforms Inc. and Snap Inc. who assert that Apple’s modifications have cost them billions of revenue, but smaller developers also complain that the feature has destroyed their businesses.
In light of this, what you’re about to read might sound a little ironic: Apple plans to gradually grow its own advertising business. Let’s start by discussing the current situation: Display adverts can currently be found inside Apple’s News and Stocks apps, as well as inside the App Store on the iPhone, iPad, and Mac. Google-like search advertising is also present in the App Store. Additionally, Apple recently included advertising for its “Friday Night Baseball” partnership with Major League Baseball inside of TV+.
The display advertising in the News and Stocks apps is identical to those you might encounter on an ad-supported website (see above). The App Store’s advertisements are for actual programs, which Apple users certainly find more valuable than mortgage rates. The inclusion of adverts by Apple in the News and Stocks applications may irk some consumers. After all, the iPhone is meant to be a high-end product.
If you spent $1,000 or more to get one, do you want to feel as though Apple is trying to extort more money from you just to use its basic features? Currently, publishers receive a share of ad revenue from the Today page of the News app, but it’s unclear how much. Additionally, Apple permits publishers to place ads inside their content while keeping the majority of the revenue.
Surprisingly, if you pay $10 a month for News+ (though it’s a smaller amount), Today’s adverts also display. Even behind a barrier, advertisements are widespread on news websites, but they are often uncommon on paid iOS services. And that feels like a significant change from when Steve Jobs proudly proclaimed that iCloud will have no advertisements when he debuted it in 2011.
Another hilarious aspect of this situation is that the company’s advertising system selects which ads to display based on information from your Apple account and its other services. That doesn’t seem to be a policy that puts privacy first. The business reports that 78% of iOS 15 users have disabled the ad personalization function, which can be found under Apple Advertising in the Privacy & Security menu of the settings app.
However, the system will continue to use information like your carrier’s name, the kind of device you use, and the books you read. Then, why are Apple apps exempt from the requirement to obtain users’ consent via a pop-up message? is a valid question. Other ATT-related apps experience the same outcome.
Apple cites the system’s inability to “track you across apps and websites operated by other firms” as the cause. ATT was created to stop that from happening. A third-party app doesn’t have to display a pop-up if it doesn’t monitor users across other third-party apps and websites. Display advertisements are presently visible on the search tab of the Suggested panel on the App Store.
Apple will also soon add advertisements to the primary Today tab and the pages where third-party apps are downloaded. Search advertising varied slightly in the App Store: Developers can pay to have their app appear in search results for terms like “basketball” or “car racing,” for example. Future goals for the IT behemoth are more expansive. Apple’s marketing division started to establish itself within the business services division a few months ago.
Todd Teresi, the vice president in charge of the ad group, began to once more report to Eddy Cue, the leader of the service, instead of Peter Stern, the deputy services head. (Teresi reported to Cue when Apple’s in-app iAd network still operated; it was discontinued in 2016). During Apple’s most recent earnings call, the ad business was again mentioned, though not in a good way. The company experienced some challenges relating to Covid, according to Chief Executive Officer Tim Cook and Chief Financial Officer Luca Maestri.
Cook called it a “wonderful” discovery tool for app developers, sounding devoted to the company nonetheless. More was spoken about the Apple Card, AirPods, augmented reality, artificial intelligence, health and fitness services, and several other significant corporate efforts on the call than Cook did. Teresi has advocated for greatly growing the business within the advertisements group. He aims to expand the $4 billion in annual revenue it currently generates to double digits. Apple must therefore step up its efforts.
I think the maker of the iPhone will eventually add search advertisements to Maps. Additionally, it’ll probably include them in digital marketplaces like Apple Books and Apple Podcasts. Additionally, TV+’s multiple tiers may increase its advertising revenue (much like Netflix Inc., Walt Disney Co., and Warner Bros. Discovery Inc. do with their streaming services). Having said that, I don’t think Apple will start running advertisements inside third-party programs anytime soon. Beginning in 2010, Apple tried and failed to do that with iAd.
Internally, the idea of integrating search advertisements into Apple Maps has already been investigated. Similar to search ads in the App Store, this functionality most likely operates similarly. For instance, a Japanese restaurant might pay to be listed first in the neighborhood when people type in “sushi.” You already understand the concept if you’ve used Yelp.
Publishers of books and podcasts might pay for their content to rank higher in search results or advertising included in the apps. Publishers could sell books inside of the Apple Books app for a long time, and downloading podcasts may also be linked to advertisements. Meanwhile, an ad-supported TV+ may provide older programming at a reduced cost—and aid in the promotion of the paid service. The only remaining issue is if Apple’s users, who embrace privacy and simple interfaces, are willing to put up with a lot more advertisements. Apple significantly reduces its acquisitions.
The iPhone manufacturer acquired numerous businesses over the past several years that resulted in significant breakthroughs. Consider Siri, which started as a company. Without Apple’s acquisition of that business in 2010, its aggressive foray into voice assistants and artificial intelligence could not have taken place. The transactions AuthenTec and PrimeSense, which gave rise to Touch ID and Face ID, are also memorable.
Over the years, that deal-making streak has persisted, resulting in the launch of new services like Apple Music, Apple News, and the revamped Weather app in iOS 16. However, even though the corporation has purchased well over 100 businesses while the current Cook has been in charge, takeovers have slowed considerably over the past two years.
Apple’s M&A expenses for the fiscal year 2021 were just $33 million. “Million,” with an “m,” to be repeated. Comparing it to what competitors like Microsoft Corp., Meta Platforms Inc., and Amazon.com Inc. spend is absurdly low. So far this year? Only $169 million have been spent by Apple, according to recent disclosures. Here, I examine Apple’s declining M&A spending, the reasons for the change, and potential future directions for the business.
Apple is reportedly planning to expand its advertising with more ads in the App Store and possibly other apps and services including Apple Maps, Books, Podcasts, and TV+. https://t.co/SJwpwp4JGn
— Liliputing (@liliputingnews) August 15, 2022
Peloton announces price increases, employment cuts, and the closure of numerous retail locations. Peloton is undergoing another reorganization nearly six months after appointing Netflix and Spotify Technology SA veteran Barry McCarthy to replace its co-founder as CEO. The company is cutting its support crew in half, outsourcing its entire internal delivery network to outside logistics partners, and removing almost 800 jobs, as I first reported.
Peloton is making major price increases for their equipment in addition to using seasonal outsourced support teams to make up for these reductions. When Peloton prepares to start closing stores in January of next year, the layoffs will continue. According to the price adjustments, the Tread will now cost $3,495 and the Bike+ will cost $500 more.
That represents a turnaround—at least for the Bike+, whose price was slashed by $500 in April. Although such are significant changes, they might be required to put the business back on track. Just take a peek at its most recent financial performance: 24% less money was brought in, and the losses were far more than expected.
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