The money Apple earns from advertising could rise to a whopping $11 billion a year by 2025, one analyst says.
Cupertino currently rakes in around $2 billion a year from ad revenue. The recent launch of Apple TV+ provides an opportunity for that to skyrocket over the next six years.
But will Apple really take advantage of it?
Apple doesn’t officially disclose ad revenue today. But it is believed to make up just a small fraction of its overall Services revenue, which reached a record $12.51 billion last quarter.
That could change over the next six years, according to JP Morgan analyst Samik Chatterjee. But that’s only if Apple makes a controversial move that it’s unlikely to make.
Apple TV+ could boost Apple ad revenue
Chatterjee suggests Apple has the potential to raise ad income by a third every year by feeding users more ads — particularly through Apple TV+, which would be a brand-new revenue stream.
Apple could also “leverage the millions of users who search its App Store and Safari browser daily to generate the stellar growth seen by Facebook and Google in recent years,” reports Reuters.
Chatterjee raises his share price target for Apple in response to this “underappreciated” opportunity.
But will Apple really bombard us with ads to boost revenue?
Could Apple go all-out on advertising?
That seems highly unlikely, even as the company looks for new revenue streams that can help it reduce its reliance on iPhone. Apple knows that no one really likes to see ads everywhere.
It would also be strange for Apple to integrate ads into Apple TV+, given that it is already charging users for access to its content. Rivals like Netflix offer an ad-free experience to their subscribers.
Maybe investors shouldn’t count on Apple ad revenue rising too dramatically over the next few years, then.