Apple's iPhone ad system raises fears

A new type of mobile advertising for the iPhone will be launched on July 1 by Apple, spurring an already fast-growing market but raising worries for many developers of applications for the device.

Big companies from Nissan to Sears to Citigroup have committed to spending $60m this year on Apple's iAds, which will open within a small number of the hundreds of thousands of applications on the iPhone and, later, on the iPad tablet. Adverts released by Apple have video and interactive components that it hopes will combine the emotional punch of television commercials with the engagement of the best Internet pitches. "It's early days, but we are witnessing the birth of a market," said Jonathan Nelson, head of Omnicom Digital, an advertising company. Christophe Cauvy, digital director at rival McCann Worldgroup, said: "This is very powerful. It's a no-brainer that's going to work."