Bank of America analysts are the latest on Wall Street to suggest the Apple could earn billions from advertising in Maps and Apple TV+ streaming.
In a research note Thursday, BofA Global Research analyst Wamsi Mohan explores the potential for Apple to build a more substantial ad business. He estimates that Apple in the September 2022 fiscal year will rake in about $5.3 billion in revenue from search ads in the App Store, and he sees the total reaching $9.8 billion in fiscal year 2024.
But that’s just the start: Mohan says Apple can generate additional revenue by creating its own ad platform, which in theory would allow other mobile apps on the iOS platform to sell ads. He also thinks the company could sell ads on Apple Maps and offer an ad-supported version of the Apple TV+ streaming service.
Mohan asserts that Apple’s biggest asset is its large installed base—there are about 1.8 billion devices in around the world, which he sees as potential conduits for advertisers to reach a large population. By moving beyond the App Store, Apple could build a $20 billion advertising business by 2026, he estimates.
MacDailyNews Take: In his note, Mohan notes that Apple can preserve user privacy even while building out a profitable advertising business:
Apple, having access to both the hardware and software, is in the unique position to allow for targeted advertising, while also maintaining user privacy,” Mohan writes. “Apple devices have information about what websites a user visits, what apps the user opens, what music or video the user listens to or watches, where the user travels. Based on this info, a profile of the user can be created and stored on the device itself, perhaps encrypted. — Wamsi Mohan
A free* ad-supported version of the Apple TV+ would do wonders for the reach of the service (and, via halo effect, for selling Apple devices) as $4.99/month (or less via Apple One) is a pittance for those who’d rather have an ad-free service; the vast majority of subscribers wouldn’t be dropping their subscriptions. A free ad-supported Apple TV+ tier would add new viewers, not convert subscribers to free users.
*It’s not really free. Those who use ad-supported tiers trade the monthly fee for their time / attention.
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Apple could build a rocket ship that mines gold from an asteroid. The keyword is “could” aka anything is possible. Apple anonymizes almost all data. For some users that is important, for other users it isn’t. But earning Google or even Facebook (and now Amazon) type ad revenue money requires having the individual user’s data. They get to see what you ads saw, how you saw them, how many times you saw them, when you bought it, how you bought it. That’s a cash cow being able to tell advertisers I can guarantee 75% users will buy this and can show each user’s actual purchase. Apple’s way is not going to provide for that kind of ad revenue. I know Apple market’s their anonymized ad tracking as just as good. No it ain’t and it likely never will be. You either know what the specific user saw and what/when they bought or you make vastly less ad money.
Not at all. If a company were offered access to Apple users eyeballs, compared to android users data metrics, the Apple access approach would be worth more. Similar to the benefit broadcast tv ads but with a greater number of people.
No ads from Apple on my device #nogo