Google paid Apple almost $10 billion to continue as default search engine
Safari on iPhone X
Apple’s Services revenue grew substantially last year and is expected to continue doing so throughout 2019. But according to the latest estimates from Goldman Sachs, a whopping one-fifth of the money generated by the business in 2018 came directly from Google.
This share translates into a figure that sits somewhere between $9 and $10 billion and is directly related to the internet giant’s search efforts. As things stand, Apple is one of the biggest channels of traffic acquisition for Google – it accounts for roughly half of all mobile revenue – and in order to maintain these numbers the company pays Apple a substantial sum each year.
This payment ensures Google will continue as the default search provider on iOS devices rather than a rival search engine. The downside to the agreement is that Apple can continue to push prices up each year and, if Google ever refuses to pay the amount, the Cupertino firm can simply approach a rival such as Microsoft and make Bing the default search engine.
For Apple, such agreements are understood to be almost pure profit and, with the company’s user install base continuing to grow, the iPhone giant can continue to increase its prices each year, thus benefiting its Services business dramatically.