According to a report in Business Week, iAd are set to take 21% of the mobile advertising market in 2010. Given that Apple went from a standing start (the acquisition of Quattro aside), that’s pretty good going. The looser seems to be Google, who in spite of buying AdMob earlier this year, have lost share not only to Apple but other third party mobile advertisers. I have blogged previously that iAd is niche and will only take a small market share. Have I now been proved wrong?

Well not exactly, no. For starters the mobile advertising sector is currently very small, although it’s value is increasing rapidly. Apple’s iAd requires a minimum spend of $1m. With such a large revenue requirment then it’s hardly surprising that their slice of the market is so big. In fact, if you look at Steve Job’s claim that iAd would take 50% of the mobile advertising market, Apple still have a way to go. Ultimately iAd will remain niche in terms of audience size simply because of it’s reach to iphone, ipod touch (and eventually) ipad users. Just as the iphone makes the most profits of any handset, I expect that iAd will follow the same route. It’s audience will be relatively small, but advertisers will use it if it continues to deliver results. And Apple will reap the profits.

Still, if I was Google, I’d be thinking hard about the next move. Having acquired AdMob, they have not yet realised the vast revenues that Google’s search advertising has. To date, they’ve pretty much run AdMob as it was previously. If they want to challenge Apple then they will need to develop new approaches to mobile advertising.