Analysts predict big things for Apple's App Store business before the company's fourth quarter 2018 earnings report, which will be released on November 1.
According to analyst Toni Sacconaghi, an analyst at Bernstein, search ads on the App Store could generate more than $ 500 million in revenue in 2018. Better yet, Sacconahi believes that the ad market in the App Store could bring in $ 2 billion by the end of 2020.
Apple wants to increase sales in recent years from its service business. Services like iCloud, the App Store and Apple Music generate enough revenue to give them the size of a Fortune 500 company. By generating more revenue from services, Apple can become more independent of the business. iPhone to earn most of his money.
Search ads in the App Store appear at the top of search queries in the App Store and are marked with a blue promotional label. Search ads are similar to Google's search ads. Developers can pay to have their app appear when users search for specific words.
Sacconaghi predicts that Apple could increase search ad revenue by increasing the number of commercials. Apple currently only allows one commercial spot per search, unlike Amazon and Google, which have two. More commercials would mean more revenue, but this could affect the quality of the user experience.
The development of new markets could also lead to significant sales growth. Search ads on the App Store are currently unavailable in China. The use of this market could significantly increase yields. Apple's goal is to double service revenue, which is expected to reach $ 49 billion by the end of 2020. Therefore, Apple needs to tap into new sources to reach its goal.
Apple's fourth-quarter results for 2018 give investors insight into sales of the iPhone XS and iPhone XS Max. Adoration of the Mac Be live blogging the whole action here.
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