A new report has revealed that Google could be set to pay Apple $3 billion USD to remain the default search engine on iOS.
Google has a plethora of high-quality apps available on Apple’s mobile operating system, iOS, but much of its revenue still accrues from being the world’s first and foremost search engine.
Now, according to Securities firm Bernstein, Google may well be set to pay Apple a whopping $3 billion USD to retain the privilege of being the default search engine on the Cupertino company’s mobile devices.
For parity, the sum is three times the amount Apple charged the Mountain View company three years ago for the exact same licensing rights – the fee is usually counted towards Apple’s service division, which includes platforms such as Apple Music.
Should Google make the payment, Bernstein notes that the sum alone may account for some 5% of Apple’s total operating profits this year given the fact that the amount is essentially all-profit for the firm.
Would Google really pay $3 billion USD? It’s difficult to say; whatever discussions emerge between the two firms will essentially be a dangerous game of chess. Though Google could turn the other cheek and walk away from the transaction, iOS devices account for a massive 50% of the company’s mobile search revenue.
This means that although Google enjoys prominence as one of the world’s most-loved search engines, Apple holds keys to a massive portion of its business.
Google has been the default search engine on iOS since the debut of the first iPhone (when the operating system was dubbed iPhone OS), and though the company lost out on the default Maps and YouTube apps that Apple provided before the debut of iOS 6, the company has successfully grown a respected bouquet of iOS apps – even including one dedicated to Assistant.
What are your thoughts? Can Google afford to pay the sum, or walk away? Be sure to let us know your thoughts in the comments below!