Report: Google to pay $3 billion to Apple to remain the default search engine on iOS

Report: Google to pay $3 billion to Apple to remain the default search engine on iOS
Securities firm Bernstein sent a note to clients today, stating that Google will end up paying approximately $3 billion to Apple this year to remain the default search engine on the Apple iPhone and Apple iPad. That is triple the amount that Google paid Apple three years ago for the same licensing rights. The revenue from Google is counted by Apple towards its rapidly growing services business. According to Apple, if its service business was considered a separate company, it would qualify for the Fortune 500.

Bernstein analyst A.M. Sacconaghi Jr. said in his firm's missive to investors that by asking for such a high licensing fee, Apple could end up turning Google away altogether. The analyst wonders at what point Google decides not to pay a dime to Apple, and counts on the popularity of its search engine to prevent Apple from including another option by default. Currently, iPhone and iPad users can change the default search engine by clicking on Safari under the Settings option. But this would be a game of chicken for Google, since iOS devices are responsible for about 50% of Google's mobile search revenue.


Google has been the default search engine on the Apple iPhone since day one. Other Google applications like YouTube and Google Maps managed to stick around the iPhone and iPad home page until iOS 6 when Apple booted them off. Google replaced both with new iOS apps available for free from the App Store, and Apple Maps replaced Google Maps as the default mapping application on the iPhone and iPad.

source: CNBC

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114 Comments

1. Xilam unregistered

For that money, as an option, apple should also allow chrome as default browser. But back on topic - this means that iOS users data is valuable to google - 15% of iOS market share is responsible for 50% of googles revenue.

3. toukale

Posts: 631; Member since: Jun 10, 2015

That's all because of buying power. Not every mobile users are worth the same. A user in the US for example is worth a lot more to an advertiser than a user any in a third world market. And since Apple owns between 65%-70% of the smartphones selling $500 and up it makes sense. Also advertisers pay between 2-3 times more on iOS because of that same buying power.

8. Xilam unregistered

That's interesting.

13. sgodsell

Posts: 7369; Member since: Mar 16, 2013

Didn't Apple change the default search for Siri on iOS to Bing back in 2013? Then in 2014 Bing was the default search for OS/X and iOS for Safari in 2014 onward. http://www.informationweek.com/software/operating-systems/apple-dumps-google-search-for-microsofts-bing/d/d-id/1269398 First of all Bing is crap, especially if you want information on other OS's. Google is a much better search engine overall compared to Bing. So Apple and Google came to an agreement for 1 year. So does that mean Google will pay Apple 3 billion every year? Which is a lot of money that Apple is getting for nothing but allowing it on their iPhone's.

17. toukale

Posts: 631; Member since: Jun 10, 2015

@sgodsell - Google will be paying at least that for the foreseeable future. It's all about leverage, if you read the reporting about the maps situation between Google and Apple you will understand.

23. Xilam unregistered

That's just proves that everyone wants a piece of the Apple pie! (Finally used that line within the context of the topic).

39. TechieXP1969

Posts: 14967; Member since: Sep 25, 2013

Or Google wants to simply keep the piece of pie they earn on iOS, by not paying a dime to begin with. Again, since users are allowed to choose default apps on Android and Windows, apple shouldn't even be allowed to do otherwise. Afterall, the argument can be made is, Windows and Android have a larger user base...PERIOD. Windows has 1.4Billion users and you could use default apps since Windows XP. That's been a long time. Android has allow user choice of defaults apps since day one. Android has nearly 2Billion users. So someone could sue Apple and say, since these 2 who have the largest market-shares are allowing this choice, Apple should not be allowed to do anything different

45. toukale

Posts: 631; Member since: Jun 10, 2015

LMFAO! at such idiotic comment.

53. trojan_horse

Posts: 5868; Member since: May 06, 2016

Why don't you provide an actual rebuttal to support your point of his comment being idiotic? Calling someone's comment idiotic without providing an actual response to back up your judgement of the person's comment being idiotic, makes your comment just as idiotic...and trollish too.

54. kiko007

Posts: 7493; Member since: Feb 17, 2016

"Why don't you provide an actual rebuttal to support your point of his comment being idiotic?" Because Techie's post IS idiotic. It only takes into account user number. There's only a negligible number of benefits to be gained from just having more users. If said group is less affluent or unable to purchase the majority of things they see in adverts, Google would be wasting their resources. Just read the article...

57. trojan_horse

Posts: 5868; Member since: May 06, 2016

I'm not even arguing whether his post is idiotic or sensible. All I'm saying is this: You can't logically confront someone's comment by calling it idiotic without providing something to back up your confrontation and to discredit his comment, because your confrontation wouldn't make any sense either. That was the point of my response to toukale. Simple.

58. kiko007

Posts: 7493; Member since: Feb 17, 2016

Noted.

80. joey_sfb

Posts: 6794; Member since: Mar 29, 2012

kiko007, Apple has taken away their user right to choose their search engine and sold that right to the highest bidder and you guy are alright with that. God, I hope Microsoft would cough out more money to let iOS user get a taste of Bing. I do use Bing as I use a Windows 10 mobile as my primary phone, good thing I have a secondary Android phone to double check my result. And believe me that Bing still have a long way to go compare to Google.

81. mrochester

Posts: 999; Member since: Aug 17, 2014

You can change the default search engine. I use DuckDuckGo.

94. joey_sfb

Posts: 6794; Member since: Mar 29, 2012

Good to know! Thanks for sharing.

107. TechieXP1969

Posts: 14967; Member since: Sep 25, 2013

You're stupid. I live for the day you will kill over from your own trolling!

95. Leo_MC

Posts: 7432; Member since: Dec 02, 2011

Things are actually opposite, since iOS has a small market share.

113. 48Chevy

Posts: 72; Member since: Jul 23, 2014

Outside of a handful of websites whose search is "powered by Google", and the rare YouTube visit, I haven't purposely used Google search since I switched to Bing in 2010.

59. adi90

Posts: 554; Member since: Dec 21, 2015

I think this article will show some light on why google is still willing to pay billions to apple. http://searchengineland.com/report-75-percent-of-googles-mobile-search-revenue-comes-from-apple-devices-221722 Money speaks.

16. therealestmc

Posts: 679; Member since: Jul 23, 2012

Safari on iOS is much better than chrome, especially if you also have a Mac.

22. Xilam unregistered

You're probably right. I didn't need to resort to anything third-party like chrome - safari is a great browser, especially with ad blocker add-ons! I was trying to be fair to google - that is A LOT OF MONEY!

40. TechieXP1969

Posts: 14967; Member since: Sep 25, 2013

No it isn't but, if you like Safari then use it an be happy :-)

42. TechieXP1969

Posts: 14967; Member since: Sep 25, 2013

Safari sucks on EVERYTHING. Even on iOS and OSX. The only broswer worse, is some cheap chinese riddled with malware browser. I use to like Opera, but I moved away. Chrome, FireFox, Mozilla, Internet Explorer and many others are way better than Safari.

60. mikehunta727 unregistered

We get it you hate everything Apple related and don't like Safari, but it doesn't mean Safari is bad, it's a actually very competitive web browser that supports pretty much almost every functionality as conpetitors and is fast like them too

96. Leo_MC

Posts: 7432; Member since: Dec 02, 2011

Plus, it has add blockers.

62. Xilam unregistered

Dude you really reek of bias. Do you think someone going to take your comment seriously?

63. kiko007

Posts: 7493; Member since: Feb 17, 2016

Techie isn't really the bastion of coherent thoughts... unfortunately.

85. GoTstan

Posts: 386; Member since: Jul 25, 2015

Try Samsung browser with one of the 8 ad blockers, it's my favorite

82. mrochester

Posts: 999; Member since: Aug 17, 2014

I agree, Safari is an excellent browser, everything gets synced between my iPad and MBP. And on iOS, it supports ad-blockers.

28. Lumia_Luigi

Posts: 173; Member since: Mar 22, 2017

Chrome sucks

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