>> [Background Music] We have 185,000 apps in the Apps Store created by tremendous developers. A lot of those apps are free, and we like that, users like that, but these developers have to find a way to make some money. And we'd like to help them. Now when you look at a mobile device, a phone, it's not like the desktop. On the desktop, search is where it's at. Search is not where it's at. People aren't searching. What's happening is they're spending all their time in apps. And this is where the opportunity to deliver advertising is. Not as part of search but as part of apps. Now we're all familiar with interactive ads on the web. Right? That's what they look like. And they're more -- they're interactive, but they are really not capable of delivering emotion, which is why the majority of ad dollars still float through television. Because advertisers can deliver an emotional message through television. Right? What we want to do with iAds is to deliver interaction but also deliver emotion. And we want to be here. We want to be even more interactive than the webs -- than the ads you see on the web. And we want to get some of that emotion from video. So that's what iAds all about. So I'd like to show this to you. So let's say this is an ad, this is an app that gives me some entertainment news and, at the bottom, I have a Toy Story 3 Banner, so you click on the banner and we take over the screen. The ad takes over the screen, comes down with animation. All this stuff is done in HTML5, by the way. It's real easy to do. [Clapping] And do you see animation and everything else? No. You see that X up at the top there? If I just tap on that X, I go immediately back to my app right where I left off. So let's go explore this ad. All right. Which is really a kind of a universe here.
>> There's a flag in my boat.
>> So, you know, I can listen to the characters.
>> To infinity and beyond.
>> And I've got some videos here, again, this is a little HTML5 gizmo.
[ Video Playing ]
And they've included a game in this ad. There we go. I've got a game. I've got posters. And I can just tap here and have them as wallpapers so, again, the advertiser can just give me some wallpaper for my phone. Theatres, if I want to see where the movie's playing, there it is right there. And so I've got my location and there's a Toy Story; mainly, a game that I can buy right in this ad. So we think this is going to be pretty exciting. Emotion plus interactivity. The ads keep you in your app so you're much more likely to click on them and want to go explore them. Because you can always get back with just a touch. They're built in the
iPhone OS, iAd is, the framework is, so it's really easy for developers to add iAd opportunities to their app. Apple will sell and host the ads, and the developer will get the majority of the revenue. So that is iAd and that is our seventh ten pole.