Apple's advertising business could be worth $20B by 2026, BofA says
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Apple (NASDAQ:AAPL) generates an unknown amount of revenue from advertising, largely from App Store ads, but investment firm Bank of America notes it could account for as much as $20B in revenue by 2026 if it went beyond that walled garden.
Analyst Wamsi Mohan, who has a buy rating and a $200 price target on Apple (AAPL) shares, noted that he estimates $5.3B in revenue comes from App Store ads, which could grow to as much as $9.8B in 2024. Other areas, such as Apple Maps and an ad-supported version of Apple TV+, could be worth an additional $10B-$12B in revenue by 2026.
The analyst estimated roughly $6B in revenue from advertising on Apple Maps and monetizing the Apple MapKit; $3B could come from an ad-supported version of Apple TV+ and $2B from an ad-management platform. 
"While the timing of such remains unclear, we expect Apple to increase its focus on the broader advertising space," Mohan continued.
Apple (AAPL) shares fell nearly 1% to $144.17 in premarket trading on Thursday.
Delving deeper, Mohan noted that Apple (AAPL) could create an ad-management platform to allow other iOS apps to sell ads on their apps and act as an ad exchange.
Mohan also notes that introducing more advertising may not come at the expense of user privacy, which has been a stalwart of Apple's (AAPL) thinking, as it is "in the unique position to allow for targeted advertising, while also maintaining user privacy."
The analyst notes that Apple (AAPL) devices know what websites a user visits, what apps they open, what music or video they consume and where a user travels, plus information from Siri. A user profile could be created and stored on the device itself and maybe even encrypted on a device's "secure element," such as the chip inside.
On Wednesday, it was reported that Apple (AAPL) iPhone 13 sales have remained strong in July despite signs of weaker demand for smartphones as a whole.