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Apple is focusing on its ad sales business because smartphone sales won’t cut it

Apple is looking to expand its ad sales business, The Wall Street Journal reports today, which would represent a significant change in the company’s business strategy. Until now, Apple has prioritized hardware sales as its main profit driver, but global smartphone sales are waning as people hold on to their expensive devices for longer periods of time. This means there’s less money in phones and more of a need for Apple to expand its business beyond hardware.

In turn, Apple has reportedly met with Snap, Pinterest, and other companies to gauge interest in an Apple ad network that would distribute ads across all their collective apps on iOS. Apple would share revenue with the apps displaying ads; the amount of that share would vary, the WSJ reports. The idea is that if someone searches for something on Pinterest, ads for a related app might show up through Apple’s ad technology. The same would happen through Snap. Apple already sells some ads based on search terms in the App Store, which led to $1 billion in revenue last year.

Apple prides itself on not profiting off user data, so it’ll be interesting to see how it beefs up its ad sales compared to the approaches of Google and Facebook without compromising its values. Google has vast access to users’ habits, like everything they search and email, and Facebook creates elaborate and highly specific profiles of its users based on social media behavior that advertisers can then target. Apple has nowhere near the same level of access, but it does have more control over its mobile platform and how apps may be linked together.


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