Apple’s Rebranded Apple Ads Probably Forecasts More Advertising ⇥ digiday.com

Benjamin Mayo, 9to5Mac:

Apple today announced that it has officially rebranded Search Ads as ‘Apple Ads’, reflecting the expanding scope of Apple’s advertising business.

When Apple first launched ads in the App Store, they were only shown as promoted search results, hence the name ‘Search Ads’. But the company now offers advertising placements in many more places beyond just the Search tab, so the old name had become a bit anachronistic.

Seb Joseph and Krystal Scanlon, Digiday:

The timing matters. Apple has spent years building its defenses, designing its own chips, overhauling supply chains — but tariffs on Chinese imports, especially under Trump’s return to the campaign trail, are reintroducing uncertainty. Some products have dodged the impact, others haven’t. And with hardware margins already tight, Apple needs new ways to protect its bottom line.

I do not think it is nitpicking to dispute calling margins of 35% on hardware “tight”.

Still, Apple is at risk of being squeezed in both hardware and software — to the extent a corporation the size of Apple can actually be squeezed, of course. Its hardware made in China is now exempt from Trump’s escalating and volatile tariff demands, but that could obviously change if Tim Cook is insufficiently grateful. Meanwhile, its Google search deal with 100% margins is at risk of being disallowed.

The advertising market is an obvious but dispiriting place to find money. Apple already has a few spots available in the App Store, and in News and Stocks, and I could see the potential for placements in apps like Maps, Music, Podcasts, and Wallet.

This rebranding and the increasingly important Services revenue charts look like a forecast for more ads. I hope I am wrong. I do not use News or Stocks, but the ads in the App Store are already a gross exploitation of Apple’s position owning these platforms. It is the kind of move that encourages understandable regulatory scrutiny.