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Essential Apple News: Is Advertising the Next Major Opportunity?

By Eric Bleeker – Updated Apr 6, 2017 at 10:36AM

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The Mac maker rushes to expand its iAd advertising agency.

Apple (Nasdaq: AAPL) not only straddles the burgeoning tablet and smartphone markets but also holds sway across the computer, home-entertainment, and media fields. The moves it makes can affect the future of hundreds of companies. With that in mind, we're taking a look at the week in Apple news, to see how its latest activity influences the Cupertino giant, its suppliers, and even its competitors.

iAd keeps growing
Apple's iAd advertising agency, created after its purchase of Quattro Wireless earlier this year, is expanding. Business Insider reported that Apple is moving the advertising agency into a larger location in New York City, not only to expand, but also to be closer to the advertising firms crowding Madison Avenue. In addition, Apple has expanded the iAd network worldwide. Previously, ads only targeted users in North America and the United Kingdom, but developers are now seeing impressions from across the globe.

iAd's an important growth avenue for Apple. The company claims that the average iPhone and iPod touch user spends 30 minutes per day using apps. Users are clearly engaged, and there are a lot of them. Apple reports that more than 100 million iOS devices have shipped, and that number continues to build at a rapid pace.

With advertisers seeking ways to reach users who increasingly fragment away from traditional television onto the Internet and mobile devices, Apple has a compelling service to offer. In addition, now that iOS' transition to the iPad has proved its scalability, expanding to Apple's next-generation AppleTV could give iAds another environment ripe for serving.

Read more about Apple's purchase of Quattro Wireless, which spawned its iAd agency.

Lawsuits are flying
Fellow Fool (and fellow Eric) Eric Jhonsa examined the lawsuit battle between Apple and Motorola (NYSE: MOT) earlier this week, and he saw nothing but a costly fight with little for either company to gain. As Eric pointed out, almost all major smartphone manufacturers hold valuable patent portfolios; to avoid costly legal battles, the industry has either looked the other way, or manufacturers signed cross-licensing deals with one another in the past.

However, with Apple generating outsized profits relative to the industry, and rival companies looking for a way to disrupt the Cupertino growth machine, the gloves are coming off. As Eric noted, Apple has valuable patents for multitouch screens, which means that Nokia (NYSE: NOK), Research In Motion (Nasdaq: RIMM), or any Android manufacturer faces a countersuit if they pick on the company.

In the end, Eric said we should expect little more than a new cross-licensing deal, with some minor level of cash changing hands. Score it as lawyers 1, mobile industry 0.

Read more about Motorola and Apple's patent battles.

T-Mobile mocks Apple, needs Apple
went after AT&T (NYSE: T) this week with a new ad that parodied Apple's old "Get a Mac" commercials. The ad presented AT&T as a weight on the iPhone's back, preventing users from getting non-Wi-Fi video chat or the purportedly faster download speeds of T-Mobile's new "4G" network.

Although T-Mobile doesn't attack the iPhone directly, it does spoof Apple's advertising style. Parent company Deutsche Telekom recently blamed T-Mobile's poor performance on its inability to attract the iPhone. Deutsche Telekom said T-Mobile has "no chance of getting [the iPhone] in the short term," but for a company that by its own admission needs the iPhone to increase its relevance, the ad could be a bold move. However, it's worth noting that Verizon (NYSE: VZ) was also fairly aggressive at targeting the iPhone in the past year. With billions on the table, even Steve Jobs can play nice and look the other way.

Read more about T-Mobile's ad and claims of being "4G."

More evidence that the iPhone's going to Big Red?
(Nasdaq: QCOM) released a stellar earnings report this week that sent its shares soaring, but the surpassingly good numbers and guidance were tempered by building inventory. One logical explanation would be an inventory build of chips for an upcoming Verizon iPhone. Call it one more piece of evidence that the often-rumored Verizon iPhone is finally coming early next year. 

Read more about the iPhone bolting to Verizon.

That's it for this week's Apple news. If you're searching for other opportunities in the mobile world, we've created a special report featuring a mobile giant that The Motley Fool has put its own money behind. Click here to get instant access to this report right now.

Eric Bleeker owns shares of no companies listed above. Nokia is a Motley Fool Inside Value pick. Apple is a Motley Fool Stock Advisor choice. The Fool owns shares of Apple and Qualcomm. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Apple Inc. Stock Quote
Apple Inc.
$149.84 (-1.26%) $-1.92
Verizon Communications Inc. Stock Quote
Verizon Communications Inc.
$39.39 (1.29%) $0.50
AT&T Inc. Stock Quote
AT&T Inc.
$15.83 (0.64%) $0.10
BlackBerry Stock Quote
$4.99 (-1.97%) $0.10
Nokia Corporation Stock Quote
Nokia Corporation
$4.36 (3.32%) $0.14
QUALCOMM Incorporated Stock Quote
QUALCOMM Incorporated
$118.93 (-1.17%) $-1.41
Motorola Solutions, Inc. Stock Quote
Motorola Solutions, Inc.
$229.62 (1.75%) $3.96

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