Apple launches new iAd software for app developers

By Rori Harrington More ads may be coming soon to your mobile device with the newly launched iAd software Apple Inc. announced this week.  The iAd system will be available with the next software version (4.0 of the iPhone OS) powering the iPhone, iPad and other mobile devises. The system is set to challenge platforms like AdMob Inc., which was purchased by Google in 2009.

Google’s AdMob acquisition is still waiting for regulatory approval. The iAd launch sets up competition between Apple and Google. Apple acquired mobile ad platform Quattro Wireless in January.

The software will allow developers to include ad programs in apps sold in Apple’s App Store, which features more than 185,000 apps from thousands of developers. Outside ad services will continue to be able to place ads in apps as well.

Apple will sell the ads. App developers will get 60 percent of the revenue for the mobile ads. Apple will get the remaining 40 percent.  Apple estimates that iPhone and iPod touch users spend approximately half an hour using apps daily. Apple’s chief executive, Steve Jobs, says people don’t search on mobile devices the same way they search on desktops.

If Jobs is correct about smartphone users getting the majority of their information through apps, there is potential for a lot of money to be made with more than 85 million iPhone and iPod Touch devices already in the hands of Apple customers, never mind the more than 450,000 iPads that have already entered the marketplace.

Jobs says iAd is meant to allow developers to keep app prices down without sacrificing their ability to make a profit.

As things stand, iAd spots will only be seen on Apple products. Questions remain on whether Apple will choose to sell the ads on other devices, and what Apple-only advertising might mean for developers.