By Aaron Pressman and Adam Lashinsky
October 23, 2018

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Great businesses beget great businesses. That’s one way of looking at Apple’s nascent advertising opportunity.

Toni Sacconaghi, the Bernstein analyst who has followed Apple for years, reckons Apple is sitting on a multi-billion-dollar ad business, a kind of sleeping giant many might view as an afterthought—but not Apple.

Sacconaghi identifies four components of the Apple ad business. Two exist already: ads in its App Store whereby developers hawk their wares and Apple News, the quietly growing anti-Google and anti-Facebook that promises to make money for Apple and the publishers whose articles Apple re-purposes. The other two areas are its hoped-for video streaming business, which the analyst thinks could be a bigger revenue driver than Roku, and Apple Maps, the also-ran to Google which nevertheless could become a meaningful business one day.

Two stats jumped out at me in Sacconaghi’s recent report to investors. He says Flipboard, the news-aggregation app built for the iPad, brings in less than $50 million in revenue. (That’s a long time to get to a point that fails to impress in Silicon Valley.) And Sacconaghi estimates Amazon’s formerly stealthy ad business, just two years old, brings in annual revenue of between $4 billion and $5 billion. He calls Amazon’s ad business the third most important driver of the stock, behind retailing and Amazon Web Services. This is relevant because Apple could have a similar business.

If Apple capitalizes on this it also shows how patient Apple is. The company is methodically mining its giant business for unexplored gold.

Adam Lashinsky
@adamlashinsky
adam_lashinsky@fortune.com

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