> If that's true, why did Apple ads start showing in iOS?

Just because Apple does things besides sell hardware, doesn't mean those other things are their primary focus. "Services" make up 'only' 22% of their revenue:

* https://sixcolors.com/post/2020/10/apple-q4-2020-results-rec...

I'd hazard to guess that App stores, Music, Pay, and TV make up the majority of revenues—and not ads.