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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."
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.
Or we will switch our users to Apple Maps. And you will never see any of us again.
Have gnu, will travel.
Google knows it will more than make up the $3 Billion from Apple users so it is willing to spend that money.
It has been shown time and time again that Apple users are more willing to buy stuff, therefore the ads to Apple users are worth more to Google and the people who place the adverts.
You're joking right?
If any company deserves to be broken up, it's Microsoft.
Apple is larger than Microsoft, so why not break up Apple first, and see how it goes?
replace with duckduckgo
DuckDuckGo is one of the built-in options with iOS - I've got it set as my default search engine.
#DeleteChrome
The four current options (in the US, anyway) for Safari's search engine are:
Google (default)
Yahoo
Bing
DuckDuckGo
I can't imagine Yahoo will be there much longer. And DuckDuckGo is relatively new - I don't believe it was there prior to iOS 8 (although I used to manually add it on my jail broken devices).
#DeleteChrome
Now THAT would make an interesting fight - and is probably closer to the reason Apple is getting paid $B.Google doesn't have to worry about Bing, but if a nice chunk of its market was "encouraged" to become an expense rather than a profitable resource - that would hit hard. I don't know if it would even actually be DuckDuckGo - I could see Apple making or sponsoring its own version.
They don't want to.
Anti-trust laws.
Larger by profits but still a small player when talking about marketshare, so they're nowhere near a monopoly which AFAIK is the only thing that can be used by law to split up a company.
#DeleteFacebook
If building a decent Google competitor could be done that fast, how come Bing is still a piece of crap? Or does Microsoft simply not spend the needed money to make Bing not suck?
Nice to get an inside look at how the invisible hand helps the market decide.
Sheesh, evil *and* a jerk. -- Jade
Apple is larger than Microsoft, so why not break up Apple first, and see how it goes?
Bigness is not a problem in itself. Only abuse of monopoly power. Apple is nowhere close to a monopoly in any market.
Apple can't make their own search engine for the same amount?
Current situation: $3B in royalty - $0 in cost = $3B in profit.
Your proposal: $3B in ad revenue - $3B in development, hosting and indexing = $0 profit.
Of course, in reality cloning Google would cost WAY more than $3B. Google's search related operating costs are more than $20B/yr.
My wife is on the iphone all year long too, and she doesn't get paid a cent :(
Slashdot: providing anti-social weirdos a soapbox, since 1997.
Apple does have a search engine, not exposed as a web page though. It's called Siri Search and works in both Safari address bar as well as from Spotlight. It does suck though. Many folks from Yahoo and Bing are already on the team, but it's size nothing compared to the big boys.
The strategy seems to scare Google with switching to an alternate search engine -- so google gives more money.
So how much does Google pay Microsoft to be allowed to be the dominant search engine on Windows?
$0.00
Interesting that Apple can, in practice, decide which engine its users' use. The way of the future I'm afraid.
What makes you think Bing is crap?
MS definitely spends real money on it. It has got a lot better.
And Google is not without its faults. I recently had a website W for which a *different* website X had a bad self signed cert pointing to W. Searches for W ended up pointing to X on Google. Took weeks to sort out. Bing never missed a beat.
I'd say Google is better if you do side by side searches, but not by much. And I am certainly glad there is some competition.
"Both yahoo and duckduckgo use bing for search. So the options are only 2 - google and bing"
Untrue:https://duck.co/help/results/sources
I guess there are limits to their "courage," then.
Because M$ is evil and the enemy of all geeks and Apple isn't?
Cost free eBook I read (by iBook/Kobo/Amazon/ObookO/Gutenberg etc.): "The Green Odyssey" by Philip Jose Farmer.
Why would Apple spend money for a service that Google is paying them to provide? Do you not have any understanding of business or economics?
You and the GP are fucking morons. Google is paying Apple. Why the fuck would Apple spend a cent on a replacement?
I very rarely use any maps app on my phone. Neither Apple nor Google Maps. My goto app is Waze. I suppose Google could pull the iOS version, but Google could also blow up its HQ with explosives.
It isn't Apple paying Google, it's Google paying Apple.
Specifically , Apple has taken a position to not monetize their customer's as product - kinds of hard to put do Google if that is your starting point
He said in jest.
Of course news about a fake are Fake News.
How many times has this been tried and resulted in total failure? Search engines, social media sites, self-driving cars, even operating systems. Poaching top talent and throwing money at the problem doesn't necessarily mean you can produce a viable alternative.
Really? But Google making a phone is OK?
But Google hardly sells any phones. Probably on purpose, to avoid anti-trust investigations.
Of course news about a fake are Fake News.
I don't use iOS, so I don't know if the default search engine is readily changed, however...
Windows defaults to Bing and Edge. No one cares about the defaults and quickly changes it over to something else because it's trivial to do. Google does not pay MS probably due to some combination of:
1) MS won't do it for any price because they want Bing to suceed
2) Google already *knows* how ineffective having the default in Windows seems to be from evidence, so it's not worth much
With iOS, it's a big unknown. Google is not sure how much the loyalty to search engine will carry over in a mobile device where the search engine branding is somewhat mitigated and in general settings are a bit more tucked out of the way than desktop. Apple doesn't even pretend to have a horse in the race of search (yet), so they are perfectly willing to sell their default to the highest bidder for now.
XML is like violence. If it doesn't solve the problem, use more.
Your proposal: $3B in ad revenue - $3B in development, hosting and indexing = $0 profit.
Well, actually, that shouldn't be the case.
Presumably there's more revenue than that, else Google probably wouldn't do it.
XML is like violence. If it doesn't solve the problem, use more.
Partially true, reading your link:
"In fact, DuckDuckGo gets its results from over four hundred sources. These include hundreds of vertical sources delivering niche Instant Answers, DuckDuckBot (our crawler) and crowd-sourced sites (like Wikipedia, stored in our answer indexes). We also of course have more traditional links in the search results, which we source from Bing, Yahoo, and Yandex."
3) Microsoft is not allowed to.
Remember, Microsoft was found to be a monopoly and an abusive one at that, so they are looked at far more closely than anyone else, including Google and Apple (once a monopoly, always a monopoly).
About the worst Microsoft could do was offer cheap Windows licenses to those OEMs who do not change the defaults of Bing and IE - it was called Windows 8.1 with Bing. It was basically a free copy of Windows for low cost PCs.
OEMs were free to take it up, or pay for a regular Windows license - perhaps some OEMs struck deals with Google to make Google the default search provider, Chrome the default browser on their Windows installations. And yes, I've seen PCs like that with preinstalled Chrome and Google as default.
Google doesn't pay Microsoft, Google pays PC OEMs.
You mean make one for negative three billion dollars? That'd be a good trick.
my last two iPhone and this iPad both defaulted to bing... everything Siri does has the powered by Bing logo... have to explicitly say "search google" to get her to do it
I'd like to see Google's reasons for this. I don't believe they think a significant number of people would choose something else if they didn't pay. Or maybe most people are so lazy or care so little that they would leave whatever the default search engine was.
This is not money for access but rather to make sure Bing can't have the default spot.
Some drink at the fountain of knowledge. Others just gargle.