But Apple cannot sell your credit card number to other people, they still need to get you to pay for it. Advertisement is different.
Advertisers pay the newspaper immediately in order to appear on the newspaper/magazine. And because they pay so much more than people buying the actual newspaper/magazine, it can be a great business for the later to attract more people... even going as far as giving the newspaper away for free.
Apple (pre iAds) was making money from you buying the phone: compared to that making money from apps sold is peanuts. So much so that it can be beneficial to let app developers in for free just to get more people buying the phone.
To summarise: Apple tries to attract customers with apps, newspapers try to attract advertisers with customers. Customers don't buy more newspapers because there are more ads, but advertisers buy more ads space if there are more customers.
Advertisers pay the newspaper immediately in order to appear on the newspaper/magazine. And because they pay so much more than people buying the actual newspaper/magazine, it can be a great business for the later to attract more people... even going as far as giving the newspaper away for free.
Apple (pre iAds) was making money from you buying the phone: compared to that making money from apps sold is peanuts. So much so that it can be beneficial to let app developers in for free just to get more people buying the phone.
To summarise: Apple tries to attract customers with apps, newspapers try to attract advertisers with customers. Customers don't buy more newspapers because there are more ads, but advertisers buy more ads space if there are more customers.