In the path of what is happening between Apple and Google, and the lawsuits that are involved right now, every week we learn more details, either directly or indirectly. The deal between both companies is simple: Google pays Apple to make this the default search engine on iOS. And this moves so many millions, that even more record figures are now being known. So much money, that it already represents around 15% of Apple’s annual profits. We tell you all the details!
Google is being investigated in an antitrust lawsuit in which Apple is being heavily involved. And recently a report was just published in The Register, in which both MacRumors and 9to5Mac expose the figures involved in the deal between both companies. And it is much more than expected.
Between 18 and 20 billion dollars a year is what Apple pockets
Until not long ago, this deal between both companies was secret. First, the business that both giants have in hand was discovered. And then people began to talk about the figures that these two have.
«In 2021 there was talk that Google was paying Apple, at most, 10 billion dollars a year to maintain the status quo. However, in a new letter to investors, analyst Bernstein says that Google’s payment to Apple now amounts to between 18 and 20 billion dollars a year«, they explain from MacRumors.
Bernstein is the analyst who published this report in The Register. Report in which he also talks about Apple’s “potential implications in the antitrust trial,” reported from MacRumors.
“We believe there is a possibility that the federal courts could rule against Google and force it to terminate its search agreement with Apple.” “We estimate that the ISA is worth between $18 billion and $20 billion in annual payments from Google to Apple, representing between 14 and 16 percent of Apple’s annual operating profits.”
With these words quoted from the report, you can see the magnitude to which this whole deal has reached, which is not only being investigated, but now we are also being able to know many more details.
15% of annual profits is a lot of money
“Search traffic on iPhones, iPads, and Macs is a worthwhile sum of money for Google,” they explain from 9to5Mac. They further add that “to maintain this traffic and this money flow, Google pays Apple an undisclosed sum of money each year to maintain its default search engine status.”
They also investigate the implications that Apple may have in all this. Bernstein also comments in the report on the following scenarios that may be coming:
«“Apple could (in theory) partner with another search engine to make it the default (and/or keep the agreement with Google outside the US).” “A more likely scenario is that Apple offers a screen to choose from. We note that Apple controls access to its installed base, which generates ~$60 billion or more in advertising revenue, and consequently, we believe that Apple would continue to charge a commission (in the range of 25-30 percent) for providing access to that advertising.