Then to continue that paragraph it says 'The presentation of the advertisement(s) can be made as part of an approach where the user obtains a good or service, such as the operating system, for free or at a reduced cost'.

I assume their logic is somewhat like we have ad-subsidized web sites (i.e. most of them), so why not ad subsidized devices? Shown on page 4 as part of the 'Advertising Control' components is 'Buy Ad Free Version'.

My guess is that this would be tied into a reduced cost iPhone. If you look down the page though, they show plans for how it would be integrated into desktop MacOS.