Google would pay Apple substantial sums to make their search engine the default on the iPhones they manufacture if anyone didn’t know. So far, there has been little money spent on this, but this year the apple manufacturer has asked for even more than before for this “favor.”
Google’s solution is the default search engine for Apple iPhones, Mac, and iPad, and it costs Google serious dollars every year. Analysts say the amount will increase by $5 billion this year, so it will now have to pay $15 billion compared to last year’s $10 billion to keep Google’s search engine the default on apple ecosystems. The information was spotted in an investor note, and the document even stated that the already small amount will continue to grow next year and could reach $18-20 billion.
Bernstein analyst Toni Sacconaghi believes Google is amassing billions of dollars in Cupertino to prevent Microsoft from overlicinating them. If this were to happen, Bing would be the default search engine on iPhones, and obviously, Google doesn’t want that.
Apple wants to increase revenue from services, including the tentacles paid for by Google. With these moves, the apple company is supposed to prove to investors that they can make a profit not only through hardware sales, at least that’s what 9to5Mac journalists think, and probably not wrong. However, analysts say there are two severe risks to Apple’s business policy.
One of the risks of a price increase is the regulatory risk, resulting in Google losing its operating license, but if that happens, it could be years away.
The other and more likely risk is that Google will get tired of bananas and won’t pay more. This can happen by fighting off a lower fee or simply refusing to pay a larger summa. This would also be a problematic situation for Apple. If they choose Microsoft’s solution, their market share could be reduced since not everyone will welcome cooperation between the two companies. Or you’ll be forced to settle for less and accept Google’s offer.