For years, the partnership between tech giants Apple and Google has centered on Google being the primary search engine on iOS devices. While this arrangement is well-known to the public, the specific terms have remained shrouded in secrecy.
A Staggering Revelation: Doubling the Payments
Recent findings from Bernstein analysts have sent shockwaves through the tech world. Their report suggests that Google now pays Apple an annual sum ranging between $18 billion and $20 billion. This figure is a substantial increase from prior estimates, making it one of the most lucrative business deals in the tech industry.
Antitrust Concerns and Potential Shakeup
The US Department of Justice is closely examining this arrangement, viewing it as possible evidence of Google’s monopoly in the search engine market. According to the report, Apple derives between 14% and 16% of its annual operating profit from this secretive partnership. Additionally, Google allocates approximately 22% of its total advertising revenue to purchasing traffic, with nearly 40% of that directed towards Apple. The report underscores that if the court decision turns against Google, Apple may consider alternative scenarios, including the development of its own search engine.
Furthermore, recent rumors suggest that Microsoft is contemplating selling its Bing search engine to Apple. If this deal materializes, it could potentially challenge Google’s dominant position as the primary search engine on Apple devices, notes NIXsolutions.
The long-standing partnership between Apple and Google now faces uncertainties due to the pending antitrust case. A final decision is expected next year, and potential appeal procedures could prolong the process.