Apple has unveiled details of a mobile advertising platform which is to be included in an update for the company’s iPhone later this year.
iAd, which will be used to allow advertisers to place adverts in third party applications, is the company’s first attempt to enter the potentially lucrative market.
The programme will allow external developers to take a 60 per cent cut of advertising revenue. Apple could employ a "hybrid" ad pricing model that would include cost per click, cost per action, and cost per 1,000 viewers. In a wide-ranging sensitivity analysis issued in a note to investors, the high-end pricing assumption could generate $32 per 1,000 viewers, at a price of $0.032 per ad, generating $4.67 billion in revenue in one year.
The announcement follows Apple’s acquisition of mobile advertising company Quattro Wireless in January for a reported $275m. Two months earlier Google bought AdMob, another mobile ad company for $750m.
Steve Jobs announced the iPhone OS 4.0 features scheduled for launching the summer of 2010 (iPhone/iPod touch) and fall 2010 (iPad) launch. Among the new features is multitasking and 100+ new features. The update also adds the mobile advertising platform ("iAd").
The iAd platform could generate an incremental $2.5 billion in revenue and $1.00+ to AAPL's financial model.