Thursday, March 30, 2023

Google will Pay $15 Billion to Apple for Default Search Engine on iPhone Devices

The competition between Google and Microsoft to put their search engine as the standard on Apple’s iOS and macOS continues to intensify. Google will pay $15 Billion to Apple for default search engine on iPhone devices, iPad and Mac in 2021 according to the Analysts.

According to a press release from Bernstein analyst Tony Sakonagi, Google has dramatically increased its payments to Apple to form Safari the default program for iOS and macOS. These notes were first published by Philip Elmer-DeWitt in Apple 3.0.

In addition to being the default search engine for the Safari browser on both platforms, Google is also used in Spotlight searches in Mac and Siri search results.

Sacconaghi Assessment on Google pay to Apple

Sacconaghi evaluates that Google can be ready to pay $15 Billion to Apple for a standard placement in 2021. That’s an increase from the roughly $10 billion Google paid for exclusivity last year. That’s a huge $3 billion increase that Google paid Apple to become the default search engine in Safari in 2017.

Sacconaghi has previously said that Google will likely pay Apple more to ensure Microsoft doesn’t exceed this. However, the amount is quite significant and is about 9% of Apple’s gross profit.

In 2007 when iPhone was launched first time Google was default search engine on iPhone. However, in 2012, Bing became the default program for iOS and macOS. He returned in 2017.

Benefits of Payment for Google

The investment could benefit Google and its parent company, Alphabet. While ventures like Waymo and Google Cloud have yet to turn a profit, the company’s advertising business remains strong. In July, Google reported record quarterly revenue and profit, driven by rising advertising costs.

Google remains the default search engine and takes advantage of the placement of mobile ads on searches and websites visited. However, Google faces hard competition from Microsoft Bing, both in terms of placement because the default program and within the courtroom.

Last year, Sacconaghi argued that Apple should buy the search engine outright to put pressure on Google. Sacconaghi’s motivation was that Apple didn’t have much of an alternative to Google, as his only leverage was the exchange with Bing. Analysts also warned that such a move could trigger regulatory oversight that could eventually block a takeover and put Apple at a disadvantage.

Read more Apple CEO Tim Cook Receives $700 Million Bonus Payout from Award

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