What it takes for Google to be the default search engine on iOS?

CIOL Writers
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USA: $3 billion. Yes, This is the amount of money that Google could be paying Apple this year to remain as the default search engine on iOS devices, according to the US-based research and brokerage firm, Bernstein.


As first reported by CNBC, the search engine company is paying out three times as much to Apple as it did in 2014 for the same privilege, with Google's licensing fees making up a large bulk of Apple's services business.

"Court documents indicate that Google paid Apple $1B in 2014, and we estimate that total Google payments to Apple in FY 17 may approach $3 billion," CNBC quoted analyst A.M. Sacconaghi Jr. as saying.

"Given that Google payments are nearly all profit for Apple, Google alone may account for five percent of Apple's total operating profits this year, and may account for 25 percent of total company OP growth over the last two years," he added.

Apple's iOS devices contribute about 50 per cent to Google's mobile search revenue, according to Sacconaghi, suggesting Google would be unlikely to walk away from the licensing deal even if it suspected Apple would stick with Google as the default search engine anyway, given its huge popularity.

Apple and Google may be arch-rivals when it comes to smartphones but their business collaboration like this one surely makes up for an interesting case study for business schools.

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