Los Angeles — Less than a week after the iPad was launched, Apple Inc. launched a direct attack on Silicon Valley rival Google Inc., unveiled its new mobile advertising system “iAd for the iPhone” on Thursday and promised to deliver a new generation of compelling interactive ads to its devices.
Chief Executive Steve Jobs announced Apple’s iAd advertising network as one of a host of features coming later this year to its iPhone, iPad and iPod Touch line, aiming to tap into an budding marketplace with huge potential.
The move directly contends with its Silicon Valley rival’s core business model and its plans to expand into mobile devices.
Jobs, said that Google’s search-based advertisements were not the future for mobile devices because users tended to spend their time inside “apps” rather than browsing the web.
“On a mobile device, search is not where it is at, not like on the desktop,” he said. “They are using apps to get to data on the Internet, not generalized search.”
By creating an advertising system into its products, Jobs said, Apple is planning to tap into the nascent, but potentially lucrative market that aims at the growing number of consumers who are picking up a cell phone when they want to access the Internet.
Analysts indicate that within five years, more users will access the Internet from mobile devices than personal computers, which could translate into billions of dollars in sales of phones, software and services.
Spending on mobile advertising in the U.S. last year was about $416 million and is expected to rise to more than $1.5 billion by 2013, according to research firm eMarketer. Online advertising generated $24 billion last year, the firm said.
Aaron Stein, a spokesman for Google, acknowledged that Apple’s entry into this arena “is more indication of how quickly mobile advertising is evolving and growing.”
Additionally, Jobs outlined the soon-to-be-released next-generation iPhone operating system. The biggest change is enhanced multitasking capabilities, which users have long requested. With iPhone 4.0, users will be able to listen to Pandora, the customized radio station app, while, say, reading news online.
Tension has been boiling up between Apple and Google since the latter has attained a foothold in the mobile phone market by developing its Android operating system for rival handset makers.