Top Apple Analyst Says iAd Is a Mobile Ad Zombie

'Apple Really Missed the Boat'

By Published on .

Most Popular

Over the past year, Apple has taken several steps to prove that iAd, its costly mobile-ad network, is still around. But one of the company's top analysts has all but called it a zombie.

During a talk on Apple's business at the Business Insider Ignition conference, Gene Munster, a senior research analyst at Piper Jaffray, said iAd is "not a focus for Apple," adding he does not expect any changes over the next two years.

Steve Jobs launched iAd in 2010 to lend Apple's devices -- and design cachet -- to mobile advertising, which he declared "really sucks." The service debuted with several large brand advertisers, but its high cost -- upwards of $10 million for exclusive categories -- kept others at bay.

iAd lowered rates. And in March, it opened up the platform to additional marketers and added video ad capabilities. It also expanded to multiple countries. Last month, Apple announced iAds would be sold programmatically, with seven demand-side platform partners, including Rubicon Project. It was a belated move to follow competitors into automated ad-buying. eMarketer estimates Apple accounted for 2.5% of the U.S. mobile advertising market in 2013, well below Google and Facebook.

"iAd just got run over by Google and Facebook," Mr. Munster said. "Apple has really missed the boat on this."

Mr. Munster added: "At the end of the day, don't look for anything from iAd out of Apple over the next few years. It's just simply not a priority."

He was far more bullish on the prospects of Apple Pay, the company's mobile payment offering, which he said would surpass PayPal in transaction volume "in the next couple years."