A small, but interesting note: Apple's published an "App Store Tip" for developers that it'll reject apps which "use location-based information primarily to enable mobile advertisers to deliver targeted ads based on a user's location." It's not to protect you.

Instead, what Mac and iPhone developer Craig Hockenberry almost certainly correctly surmises, "Looks like Apple is going to keep location-based advertising to themselves."

Let's step back for a second. Apple, as you might know, spent $275 million on the mobile ad company Quattro, after previously trying to acquire AdMob (before it was snatched by Google). The CEO of Quattro is now VP of Mobile Advertising at Apple. Apple has now openly declared itself a mobile devices company. And according to BusinessWeek, Apple's working on "ways to overhaul mobile advertising in the same way they had revolutionized music players and phones." Apple is serious about mobile advertising. That's point one.

Point two is that the vast majority of downloaded apps for the iPhone are free. The way to make money off of them is through ads—AdMob's done a decent job of getting ads into iPhone apps (which, it was speculated, is why Apple wanted to keep it away from Google). Right now, those ads are mostly, but not exclusively, banners and splash ads. A related point is that there's no Flash on the iPhone, so there's no way to do the kind dynamic ads that Flash allows.

The obvious presumption is that Apple wants to control the entire experience of using the iPhone (and iPad), all the way down to the ads you see, and wants to make the mobile ad experience better, not just for users, but for advertisers. (And of course, take a slice of the ad revenue.) So it's not too much of a stretch to see Apple's ad platform in the future being the best way to deliver ads in apps, which might offer perks like, say, location-based targeted advertising, or more dynamic ads than you can do now on an iPhone. It's also not crazy to think Apple's way is going to be the only way to get some of those features, like location-based ads. (The pro-Apple argument being they can ensure the ads are fully integrated and don't disrupt the experience of using the phone, blah blah.)

Obviously, the iPad's another huge advertising opportunity on top of the iPhone, so it makes even more sense to play in mobile ads. It might not shake down that way (the key word in the warning not to use Core Location for ads is primarily, so maybe there's leeway), with Apple asserting such a tight grip on ads on its platforms, but it wouldn't be shocking either, if Apple suddenly gives itself an overwhelming advantage in the field. [Apple via Dylan Beadle via Craig Hockenberry]