Such a lazy take. Yes, they show ads based on what you search for in the App Store. They will also show apps based on location if the customer opts in to that feature. No other data is used. No browsing history, no purchase history, nothing like what other companies are collecting.
Glancing at your comment history I can't help but notice that most of your comments are related to defending Apple, even at points where the consensus on HN is that Apple is obviously in the wrong. I applaud you, sir.
Eventually the addressable market for iPhones will saturate, but the growth imperative will remain.
If I were king of Apple and I truly valued user privacy, I would be careful not to tie any revenue streams to products that entail the progressive violation of user privacy.
https://searchads.apple.com/privacy