While Apple chief executive Steve Jobs focused on the new iPhone 4 at this morning’s WWDC announcement, he also made a bold prediction – that his company would control nearly 50% of the US mobile advertising market in six months.
The prediction comes as Apple prepares to switch on its iAd platform on July 1, with software developers and larger corporations set to take advantage of the new mobile network with interactive advertisements.
During this morning’s announcements, Jobs said iAds would be used first by some large names including Nissan, telco AT&T, Target, Best Buy and Disney.
Jobs even showed off one of Nissan’s new interactive ads, which allows users to move a digital car model around on the screen and sign up to an early notification program for one of the company’s new electric cars.
This interactive format, Jobs says, differentiates the iAd platform from other mobile advertisements. Because of this, the company says developers will be able to show off their apps within ads instead of just through screenshots on the App Store.
The iAd platform will run on all iOS devices, which includes the iPhone, the iPod Touch and the iPad.
Perhaps the biggest announcement of the morning was Jobs’ prediction the iAd platform would control 48% of the US mobile advertising market during the next six months. The company already has $US60 million committed to mobile ads.
However, that’s a big call. According to figures from JP Morgan, the US mobile advertising market is expected to grow by 45% during this year to $US3.8 billion, with $3.2 billion in SMS advertising, $253 in million mobile display and $321 in million mobile search.
It is uncertain whether Jobs was referring specifically to the mobile display market. If so, making up roughly $125 million of the projected $253 million mightn’t be as difficult as some analysts predict.
While Frost & Sullivan analyst Phil Harpur says the mobile advertising market is set to take off, he isn’t sure whether Apple has enough momentum to grab 50% of the industry.
“I think that figure sounds extremely optimistic, but the platform itself has a lot of potential. I think with previous advertisements you’ve been limited in screen size, but interactive full-screen ads could change that.”
“They’ve had great success with applications so far, and I imagine they’re about to take a pretty good slice of advertising.”
Jobs says the company has only been selling advertisements for eight weeks. However, with several big brand names including Chanel, Uniliver and Campbell’s Soup already signed up, the 48% figure could be easier to acquire than expected.
“Look, I think there’s no doubt iAds can make a solid impact pretty quickly. But even so, it might take a while to gain adoption. That always happens with something new.”
“I think it could happen, but it might take awhile. There are a lot of positives, and I think Apple is going to gain a lot of market share in the process.”
Apple is taking on Google with the iAd platform. Recently Google acquired AdMob for about $US750 million, and intends to take on the mobile advertising market in a big way through search.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
