Apple Ads Growth

Apple’s ad business is growing extremely quickly. At the moment it’s estimated that Apple’s Ad business revenue is ~$2.5B @ a 50% gross margin. By 2025 I expect this business to roughly 8-10x and contribute to Apple’s income in a meaningful way.

Apple recruiting very capable ad executives paired with its control over the iOS ATT framework make its budding ad ecosystem a very dangerous threat to companies like Google and Facebook. This part of the business is greatly overlooked by many investors and Apple fanboys and will eventually become the center of attention when its business balloons to over $20B in revenue.

As its ad business becomes larger, Apple faces some initial headwinds in narrative. We’ll get to witness how Apple’s narrative around ads directly conflicts with its narratives around privacy protection. With this amount of control, Apple can limit the amount of effectiveness its ad competitors have while having all the ability to take share for themselves. It’ll be interesting to see how Apple will navigate making the rules and also sticking to them internally.

Apple also has the potential to reframe the way apps can get discovered or distributed outside of just its App Store - I’d guess this is one of their main ambitions; their ad technology would easily extend to additional channels for app discovery in other properties like Apple News, Maps, and TV+, making it potentially one of the most useful ad networks for iOS developers.