Dec. 13 (Bloomberg) -- Apple Inc. is losing ground to Google Inc. and Millennial Media Inc. in the U.S. mobile-advertising industry this year, according to research firm IDC.
Google, which leads the market, will see its share rise to 24 percent from 19 percent in 2010, said Framingham, Massachusetts-based IDC. Millennial’s slice will climb to 17 percent from 15 percent, and Apple will decline to 15 percent from 19 percent, IDC said.
The three companies are the largest competitors in the U.S. mobile advertising market, which will more than double to $2.1 billion this year, from $877 million in 2010, according to IDC. Google has solidified its market lead, while Millennial has assumed the No. 2 position in mobile ads. Apple is missing out on contracts because it only lets customers advertise on its devices, said Karsten Weide, an analyst at IDC.
“This is primarily a story about Apple’s weakness,” Weide said. Many advertisers chose competitors’ ad networks so they could reach both Apple and non-Apple devices, he said.
Tom Neumayr, a spokesman for Cupertino, California-based Apple, declined to comment. A Millennial Media spokeswoman, Mack McKelvey, also had no comment on the report, which she hasn’t seen. A Google spokesman, Aaron Stein, said the company won’t comment on third-party research.
Mobile-display ad revenue for 2011 will total $630 million, while mobile-search ads contribute the larger chunk of the mobile-advertising market, $1.5 billion, IDC said. Search ads appear alongside query results, while display ads appear as banners or short video clips on Web pages.
Google has been the largest beneficiary of consumers using smartphones and tablets to access the Internet and view mobile ads. The company dominates mobile search, with a 91 percent share. Its combined market share for mobile display and search ads will rise to 71 percent, up 11 points from last year, IDC said.
Millennial, meanwhile, has talked to bankers about a potential initial public offering, people with knowledge of the discussions said earlier this year.
For 2012, IDC expects the U.S. mobile advertising market to almost double to $4.1 billion, largely because of Web searches.
“Advertisers have decided that the mobile device is best suited to search,” Weide said. As for display ads on the smaller screens on mobile devices, “the impact on the consumer is considered to be worse than on desktop.”
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