Google to pay Apple large amount of money to remain default Search Engine
When we are talking about two tech giants Google and Apple, it’s too difficult to tell who’s winning. The best thing to observe about them is that not only do they compete to each other, but also partner on certain specific deals and there comes the reason why Google had to pay a small fortune to remain default search engine on iOS.
According to a Bernstein analyst, as CNBC reported, Google could pay as much as $3 billion to Apple a year just to remain the default search engine on iOS devices. Bernstein analyst also reported that according to previous court document from 2014, Google had to pay $1 billion back in 2014 to remain default search engine on iOS.
As the fact suggests, Apple holds 18% of the smart phone market and hence Google is still dependent on Apple for generating large revenue from ads on search result pages. The sales of iPhone have been growing since 2014 and it turns out to be around $3 billion or more if we consider Google’s TAC (Traffic Acquisition Cost) and the Apple’s licensing revenue.
With the updated version of iOS, it was difficult for Google to remain the default setting for millions of iPhone users. Hence, Google had to spend a lot of money to remain default search engine on iOS.
The entire Analysis shows that Google alone may account for five per cent of Apple’s total operating profits this year, and may account for 25 per cent of total company OP (operating profit) growth over the last two years.
Nevertheless, Dependency of Apple on Google is also not hidden. While Bing and other search engines have gotten better with year, none of them can compete with Google especially if we are using it in languages other than English. Also, it is impossible for Apple to get as much revenue from Bing and other search engines as Google. The most important thing is, although Google is paying them a vast amount of money, but they are also increasing the dependency of iOS users on Google. That may turn out the other way round as Apple users may prefer Google products, specifically android. The Competition is difficult to predict, but none of them will stop competing each other.
This asynchronous competition between Google and Apple Keep others motivated about the kind of competition any Tech giants can have. They partner for certain aspects and then they do compete each other on the smart phone front.