Apple will expand its advertising business within its own "ecosystem," it says.
Sources familiar with the matter said new privacy rules Apple plans to implement will likely affect commercials by competing advertising companies such as Google and Facebook.
Apple already sells search ads for its App Store - allowing developers to pay to have their products within the search engine's top results. Apple will add new features and rules within its network that favor its own advertising business.
Sources said Apple planned to introduce a second advertising slot within the "suggested" apps section in the App Store - which may be introduced in April. According to sources, advertisers opting to use the company's new ad service can promote products across Apple's network.
During its next operating system update, Apple will ban apps and advertisers from collecting user data without explicit consent. When implemented, the new rules are expected to shake up the broader $350 billion digital ads industry within Apple's network.
More than 47% of smartphone users in the U.S. are iPhone users - or about 113 million customers. Last year, Apple chief executive Tim Cook said it had about 1.4 billion active devices worldwide.
Apple said the new rules would enhance user privacy. However, critics accused the company of boosting its own advertising business. Most users are expected to decline to be tracked by other apps and advertisers - which will give Apple a big advantage.
Facebook chief executive Mark Zuckerberg criticized Apple for implementing the rule - echoing similar concerns raised by other online advertisers.
"Apple may say (it's) doing this to help people. But the moves clearly track with (its) competitive interests," Zuckerberg said.
Apple began its mobile advertising business in 2010 after it acquired mobile advertising company Quattro Wireless for $275 million. Apple then launched iAd within the same year. Analysts at Bernstein estimate Apple may be earning up to $2 billion a year from search ads on its App Store, Stocks and News apps.