Some analysts claim that the market for mobile device advertising will reach $2.5 billion this year. However, this is one market where Apple may be losing ground.

Apple rolled out iAd a year ago and companies like J.C. Penny and CitiGroup paid at least one million dollars to get their ads on iOS devices. But both of those companies are no longer using the advertising service, and have taken their business elsewhere. Now, Apple is getting aggressive with pricing and reduced the cost to launch an iAd campaign by 70 percent from its original seven figure tag. If you want your product or service to be advertised on the iAd network and you are willing to commit to multiple campaigns, you only need to bring $300,000 to the table.

According to a report from Bloomberg, even with the drastic price reduction, Apple is still going to have a hard time getting advertisers to buy in. Other advertising platforms like Google's AdMob can push ads onto multiple operating systems and reach consumers outside of Apple's base of customers.

Senior vice president of strategy for New York ad agency Young & Rubicam, Thom Kennon, puts it this way: "Apple’s closed ecosystem may have been interesting in the short run for advertisers, but in the long run they priced themselves out."

Apple is not ceding this market, however. Aside from cutting prices, Apple is also getting aggressive in reaching out to potential new clients. Cupertino has hired former advertising agency executives to bolster its staff, and has developed the cleverly named iAd Producer to help advertisers produce iAd campaigns quickly.

iAd is still a big dog in the pack, too. In the first year for iAd, Apple "launched more than 100 campaigns in seven countries," according to spokesperson Natalie Kerris. Apple also claims that in the past month, twenty companies have used iAd, and that fifty campaigns are scheduled for the next few months. Those are significant numbers, and the industry realizes the potential that Cupertino brings to the mobile device market.

"iAd may have receded into the background," states Noah Elkin, analyst at EMarketer. "But it's too early to assume it's not going to come back."