Apple already generates notable high-margin advertising sales on its devices, but it has significant opportunities to continue growing its ad business, a Wall Street analyst writes in a new note to clients.
Patrick Seitz for Investor’s Business Daily:
“We believe Apple advertising on its own apps is underappreciated,” Barclays analyst Tim Long said in a note to clients Tuesday. “Most ad revenues are generated on the App Store, with some contribution from News and Stocks. This could expand to other apps like Maps, TV+, Podcasts, etc.”
Long estimates that Apple generated $5.3 billion in advertising sales in 2022. He predicted that ad sales will rise 42% in 2023 to $7.5 billion. And he sees Apple’s global ad revenue hitting $19 billion by 2026.
“Over time, Apple could expand ad revenue through Apple Maps and Apple TV+, which we view as the two low-hanging fruits,” Long said. The company is likely to expand its advertising reach to more apps “in the coming months or quarters,” he added.
MacDailyNews Take: Clearly, there is much headroom for Apple’s advertising business going forward.
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