If you think Google and Apple are big time competitors, think again because these two seem to be sharing a partnership worth billion of dollars, as reports have it, Google is paying Apple billions of dollars to be the default search engine on IOS.
Google’s licensing fees make up a large bulk of Apple’s services business- Bernstein
According to reports by CNBC, investment research firm Bernstein says Google will pay Apple about $3 billion this year, up from $1 billion just three years ago, and that Google’s licensing fees make up a large bulk of Apple’s services business.
A.M. Sacconaghi Jr., an analyst with Bernstein was quoted as saying; “Court documents indicate that Google paid Apple $1B in 2014, and we estimate that total Google payments to Apple in FY 17 may approach $3B.” “Given that Google payments are nearly all profit for Apple, Google alone may account for 5% of Apple’s total operating profits this year, and may account for 25% of total company OP growth over the last two years.”
This is a good business deal for both companies; after all, Google secures most of its revenue from ads that come from Apple mobile ads and Apple gets a huge cash from Google without making so much effort as Google keeps pumping in the cash to stay where it is.
One question that can not be ignored however is; what if Google is not Apple’s “default search engine”?