During the announcement of iPhone OS 4.0 this week, Steve Jobs also unveiled iAd, its new advertising service, which will allow developers to embed advertising into their software.
When users currently click a mobile ad, they are usually redirected to a company website or directly to the App Store. Using iAd, the advertisements will act like miniature apps that run on the mobile device.
At this point you’re probably wondering why anyone besides developers of third-party software would care about iAd. You should care because it’s going to lead to more free apps.
Obviously, developers want to make money off their work, but users want free software. In-app adversing gives both these groups what they want. All users have to do is put up with a little advertising to get free apps.
Apple is going try to make iAd easy enough that developers will embrace it. Apple is going to oversee ad sales, and developers that use the service will split profits with Apple 60/40.
Once Apple gets iAd off the ground, I expect many apps that are for-pay now will become free because of in-app ads.