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Will the iPhone 4G be an ideal canvas for mobile advertising?

With AT&T stopping shipments of older iPhone models to its retail outlets, and Walmart slashing the price of the 3GS to $97, rumors are swirling that Apple will take advantage of the upcoming Worldwide Developers Conference on June 7 to announce the iPhone 4G.

Apple is a master of generating buzz, which it has done recently for the iPad and the iAd mobile ad network (see story). But will the new iPhone operating system and the rumored launch of the iPhone 4G move the needle for mobile advertising?

?Apple has certainly used the Worldwide Developers Conference to make announcements in the past, so it certainly would not be surprising given that timetable to see a new iPhone announced at the conference, particularly given all the attention to the 4G prototype discovered a few months ago,? said Ross Rubin, director of industry analysis at the NPD Group, Port Washington, NY.

?It appears as though Apple is pursuing an exclusive approach in terms of ad platforms with iAd, and it appears to be trying to raise both the technical production values of the ads as well as the rates, what will be charged for the ads, which will be key to support the breadth of free software that is available for the iPhone to keep it commercially viable,? he said.

Last month, Apple officially unveiled plans for the iAd platform and the iPhone OS 4, releasing a beta version of the software to its Developer Program members.

The iPhone OS 4 beta release includes an updated Software Development Kit with more than 1,500 new Application Programming Interfaces and about 100 new features that will be available to iPhone and iPod touch users this summer.

New features include multitasking for third-party applications, folders to better organize and access applications, improved mail with a unified inbox and enhanced enterprise support (see story).

?The iPhone 4G represents an opportunity for marketers, because clearly Apple has a lot of volume out there, and it?s doing more with geolocation,? Mr. Rubin said.

?The iPhone 0S 4.0 enables different location-based services, including some that marry digital aspects of the mobile world with commerce in the physical world,? he said.

?OS 4.0 brings the iPhone beyond what was possible on the platform before.?

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While the iPhone OS 4.0 features have been publicized intentionally, the actual iPhone 4G device was publicized unintentionally when a developer allegedly left a prototype of the handset in a Silicon Valley bar.

Apple seemed none too pleased about the incident, and a firm date for the release of the iPhone 4G has still not been revealed.

?The rumors seem to be strongly pointing toward the imminent arrival of a new iPhone, although with Apple you never know until you know,? said Noah Elkin, senior analyst at eMarketer, New York.

?But assuming the rumors and recently leaked photos are reasonably accurate, they, along with what Apple has already announced with iAd, suggest a greater degree of integration between device and advertising,? he said.

?If well executed, that could strengthen the appeal of the iPhone as an advertising platform.?

Apple Inc. plans to charge $1 million for in-application iAd packages and $10 million for launch campaigns, and many in the mobile industry are waiting to see which brands pony up and what the campaign creative will look like (see story).

If successful, iAd?with the iPhone 4G and the iPad as the showcase platforms?could spur increased interest and investment in the mobile advertising ecosystem as a whole.

While its devices have been selling like hotcakes, Apple has received its share of criticism for refusing to support Adobe?s Flash (see story).

Also, wireless network issues have plagued Apple?s data-devouring devices.

There is some debate as to whether or not AT&T will retail its exclusivity agreement with Apple for the iPhone 4G. That could determine its level of success.

?If AT&T and Apple are able to address well-known mobile service issues with a new 4G handset, that would go a long way to boosting their ability to deliver rich location-based marketing applications, as well as shoring up the overall promise of their mobile platform,? said Andrew Frank, New York-based vice president of research at Gartner.

Overall, the level of enthusiasm for any Apple launch tends to be high, and where there is consumer interest, brands inevitably follow.

And each new platform brings with it new optimization challenges, but also a fresh canvas for marketers to work their magic.

"Every new generation of mobile devices to come out of the smartphone manufacturers brings with it an exciting new set of features for developers to implement in their applications,? said Eric Litman, chairman/CEO of Medialets, New York.

?When marketing executives, as consumers, carry these devices and become accustomed to the new features on these new platforms, they'll start to demand them from the publishers and networks from whom they buy media,? he said.

?In particular, you'll see new things like enhanced abilities to add items to address books and calendars immediately making their way into in-app advertising with more richness to come as those providers become more familiar with the new platform.?