Google may have paid Apple $3 billion to remain iPhone’s default search engine

Google may have paid Apple $3 billion to remain iPhone’s default search engine
August 14 15:32 2017

Google is paying Apple an estimated $3 billion per annum, or more, in order to remain the default search engine on iPhone, iPad and iPod touch devices, according to a new analysis from Bernstein analyst Toni Sacconaghi cited by Business Insider.

In other words, Google may account for as much as five percent of Apple’s total operating profits this year and up to one-quarter of total operating profit growth recently. Google’s agreement with Apple gives it a percentage of search revenue generated through queries users conduct on their iOS devices.

That would be a significant increase from the $1 billion Apple received from Google in 2014 in order to keep its search engine as the default option on iOS devices. We know about the 2014 figure because it leaked out from a transcript of court proceedings in Oracle’s ongoing copyright lawsuit against Google.

Digging through Apple’s quarterly filings and focusing on the company’s booming Services business, which includes licensing revenues like those Google pays Apple, Bernstein has determined that Google could be the biggest or second-biggest contributor to services growth.

Sacconaghi and his team came to that numbe by extrapolating the $1 billion payment in 2014 for Google and Apple’s growth in the relevant line items in the three years since then. If the Apple-Google revenue share really was at one point 34 percent—as prior reports suggested—and assuming that’s still the case today, Apple is poised to receive “a much higher” sum from Google in the future than the $3 billion today.

Whatever money Google pays Apple is likely all profit, Bernstein points out.

To change your default search provider on iOS, go to Settings → Safari → Search Engine.

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