The news: Apple’s services business, which includes advertising and subscription revenues, grew 24% year over year last quarter to a record $19.5 billion, according to its earnings report released last week.
Dig deeper: It’s likely that a large share of this category’s growth comes from advertising—more specifically, App Store search ads.
What this means: The service revenues only reinforce what many marketers already knew: Apple itself is benefiting from its AppTrackingTransparency privacy changes last year, even as publishers and advertisers struggle with it.
Meanwhile: Google has updated its Play Store to include an “offers” tab, a discovery hub for sales and free trials of paid apps and discounts on digital content like ebooks. It’s a clear fit for adding more sponsored app ads and could be Google’s answer to the runaway success of Apple’s App Store advertising business.
What’s next? Though Apple is reaping the benefits now, the sheer scale of its growth will be hard for antitrust regulators to ignore for too long. Even though its iOS 14.5 changes were made in the name of privacy, regulators are unlikely to take kindly to how much of an advantage they give Apple’s own ad business.