Idealistic Apple Developed iAds To Keep Apps Affordable

Why did Apple come up with iAds, the company’s new platform for mobile advertising? It had nothing to do with the $60 million Apple has already taken in from companies like Nissan, GE and Best Buy. And it apparently didn’t have anything to do with Apple’s plans to control nearly half of the market for mobile ads. No, the real reason is simple. As CEO Steve Jobs explained it today, Apple created iAds “for one simple reason: to help our developers earn money so they can continue to create free and low-cost apps for users.”

Speaking at the company’s annual developers’ conference, Jobs showed off a number of features of the new ad platform, including interactivity, video, and “emotion,” all from within iPhone apps. Apple’s business model is to both sell and host the ads, for which the company will take a 40% cut of the revenue. In a prepared statement, Jobs said:

“iAd offers advertisers the emotion of TV with the interactivity of the web, and offers users a new way to explore ads without being hijacked out of their favorite apps,” said Steve Jobs, Apple’s CEO. “iAds will reach millions of iPhone and iPod touch users—a highly desirable demographic for advertisers—and provide developers a new way to earn money so they can continue developing free and low cost applications.”

Jobs did not state whether the bandwidth used to download iAds would be deducted from consumers’ data plan allotment. When the platform was announced earlier this year, all iPhones came with unlimited data plans. However, AT&T recently shifted to metered plans for new customers.

In just eight weeks, according to Jobs, the company has sold over $60 million in ads, which represents nearly half of the total projected U.S. market for mobile ads in the second half of 2010. The new platform rolls out on July 1st.

Live WWDC 2010 keynote coverage [gdgt live]