Google Pays Apple $3 Billion Per Year To Remain On the iPhone, Analyst Says (cnbc.com)

In a note to investors on Monday, Bernstein analyst A.M. Sacconaghi Jr. said Google is paying Apple billions of dollars per year to remain the default search engine on iPhones and iPads. "The firm believes that Google will pay Apple about $3 billion this year, up from $1 billion just three years ago, and that Google's licensing fees make up a large bulk of Apple's services business," reports CNBC. From the report: "Court documents indicate that Google paid Apple $1 billion in 2014, and we estimate that total Google payments to Apple in FY 17 may approach $3 billion," Bernstein analyst A.M. Sacconaghi Jr. said. "Given that Google payments are nearly all profit for Apple, Google alone may account for 5% of Apple's total operating profits this year, and may account for 25% of total company OP growth over the last two years."

Comments

ROI

[Anonymous Coward]

I presume G has done the ROI calculation of gaining iDevice search ad revenue, and it is estimated to have increased by more than that $3B, but I really think G would be better off letting Apple default to using Bing for a year. The Android eco-system (and the Pixel group) will love the increased customers.

Re:ROI

[MouseR]

It's not a guess when the article states 50% of all Google ad revenues come from iOS.

Google fucked with Apple, using their privileged early access to the device & SKDs by cloning most aspects of it and try to undercut Apple's new market. They might have the numbers, but they fail at the margin. So they're stuck continuing paying Apple's license in order to monetize.