Apple has notified its app developers that they cannot use location data collected from iPhones/iPod touch (and soon to come iPad) to deliver ads. However, App developers can continue to use the location information to ‘provide beneficial information’ via their app. Many developers use inapp advertising as a revenue source, and this enables them to offer their apps for free.
If you build your application with features based on a user’s location, make sure these features provide beneficial information. If your app uses location-based information primarily to enable mobile advertisers to deliver targeted ads based on a user’s location, your app will be returned to you by the App Store Review Team for modification before it can be posted to the App Store.
Another hint of increasing Google / Apple rivalry? Google recently acquired Admob which is the biggest mobile advertising player in the US currently. Not being able to serve location based ads might be a critical disadvantage in case of mobile advertising for Admob. Given the dominance of the iPhone / iPod touch wrt to mobile internet (and soon to launch iPad); I won’t be surprised if Apple now wants to monetize this position aswell. . Apple recently acquired Quattro – a mobile advertising company. Future integration of Quattro with the iPhone platform might give the option of location based ads inside apps. Atleast these conspiracy theories are out for now …
Apple has already uncovered a fantastic alternative revenue model for smartphone with the App store. This is something the industry is now following. Given the Apple’s strong grip control over the iPhone ecosystem (yes the infamous wall-gardened approach); they might well discover the prospect of an ad supported OS (we did read about their patent for an ad supported OS).