Apple plans to implement an ad platform into the latest version of its iPhone OS, in a clear play for territory dominated by archrival Google.
Apple said the new OS will include an advertising capability called iAd, which will allow developers of apps for the iTunes App Store to implement ads into their software.
This will give developers of the vast majority of app submissions which are free a potential revenue stream from the store.
Apple plans to sell the ads, and give developers of apps which host them a 60% cut of the revenue.
The platform will deliver full-screen video and interactive ad content within apps, letting users return to where they left off whenever they want, Apple said.
The New York Times quotes CEO Steve Jobs as saying the mobile ad market is distinct from the PC search market, which has been dominated with Google's search-based ads.
“People are not searching on a mobile device like they are on the desktop,” he said.
He also said the platform was designed with the needs of the developer community in mind, rather than profit for Apple. And he confirmed long-held suspicions that Apple had bid for mobile advertising company AdMob before Google snapped it up for $750 million.
With US regulators threatening to challenge Google's purchase of AdMob, Google could face a tough battle in its efforts to dominate the mobile ad market in the same way it dominates PC-based advertising.
And the market is just developing - researchers estimate that US advertisers spent just $416 million (€310 million) on mobile ads last year, compared to an overall online advertising market of $22.4 billion, WSJ.com said.
Other features added to the iPhone OS include the long-expected introduction of multi-tasking, a mobile device management security service, encryption-based data protection and a unified email inbox.
But not every change Apple introduced yesterday was aimed at making life easier for all developers. The company also updated the license agreement for its iPhone Developer Program, banning the use of third-party compilers for creating apps for the iPhone OS.
The move is a shot across the bows for Adobe, which was planning to create a compiler to allow developers to create apps in Flash and then port them to the iPhone or iPad - neither of which support the technology.
Adobe told NewTeeVee it was aware of the change and will investigate, but will in the meantime continue to develop its Packager for iPhone OS.