According to Bloomberg, Apple may expand its advertising to more of its first-party iPhone apps in an effort to increase revenue.
According to the report, the company’s ad business currently generates about $4 billion in annual revenue, but the company wants to grow the segment into the “double digits.”
Apple already displays advertisements in some apps, such as Apple News and Stocks. It also recently announced plans to increase ad placement in the App Store. According to Bloomberg, the company is considering ways to add advertising to Apple Maps, which has so far distinguished itself from its competitor, Google Maps, by not displaying advertisements. According to the report, Apple also inserts ads into the stores for Podcasts and Books.
An Apple spokesperson did not immediately respond to a request for comment on the report. Meanwhile, Apple has targeted other companies that target iPhone users with advertisements.
Apple released an update for iPhones last year that included a new popup that asked users if they wanted to allow apps on their phones to target them for ads. The App Tracking Transparency privacy feature has upended the behind-the-scenes mechanics of many mobile ads, particularly those that confirm whether a purchase or download was made.
Most iPhone users clearly opted out, and the feature has presented significant challenges to companies ranging from Snap to Facebook to Peloton. The new ads may help Apple extract more value from iPhone users.
Needham analysts wrote in an Aug. 3 note that they believe Apple’s next big revenue stream will be advertising.
They claimed that “AAPL has best-in-class user data.” “By developing a DSP (demand side platform), Apple will be able to control how and where its data is used, as well as prevent data leakage outside of its Walled Garden.”
Analysts believe Apple is also in the early stages of developing a new mobile advertising platform. They reported a “notable uptick” in the company’s recruiting efforts for its Ad Platform, which was prominently displayed at the Cannes Lions advertising festival in June.
According to Bernstein analysts, Apple’s Services business, which is primarily driven by advertising and the App Store, has seen a slowing growth rate for four consecutive quarters due to a shift in consumer spending.
They do, however, expect Apple’s ad business to grow as a result of increased ad loads in the App Store.
“Overall, we believe that Apple’s overall Advertising segment can achieve at least 20% growth over the next few years,” they said.