Google Could Pay Apple $15 Billion to Maintain Default iOS Search Engine Status in 2021, Suggests Analyst

It's no secret that Apple and Google have a considerable monetary agreement that ensures Google's position as the default search engine on Apple's devices. In a new investor note by financial advisor Bernstein's Toni Sacconaghi, the analyst claims Google's payment to Apple to maintain the status quo could reach $15 billion in 2021, up from $10 billion last year.

safarisearchengineios
First reported by Ped30, Sacconaghi's note estimates that Google's payments to Apple could continue increasing on-year and approach $18-20 billion in 2022. The Bernstein analyst bases his numbers on Apple's public filings as well as a bottom-up analysis of Google's traffic acquisition costs.

Google's agreement with Apple in the search and advertising markets has been in place for over a decade, but with Google's search engine dominance coming under increasing scrutiny in recent years, Bernstein analysts believe the agreement could face a regulatory risk.

In addition, Yahoo and Microsoft have both been interested in inking a deal with Apple to overthrow Google as the default search engine on iOS devices, and the analysts suggest Google's huge payments to Apple are made to ensure Microsoft doesn't outbid it.

We see two potential risks to GOOG’s payments to AAPL: (1) regulatory risk, which we believe is real, but likely years away; we see a potential 4-5% impact to Apple’s gross profits from an adverse ruling; & (2) that Google chooses to stop paying Apple to be the default search engine altogether, or looks to renegotiate terms and pay less. We have noted in prior research that GOOG is likely paying to ensure Microsoft doesn’t outbid it. That said, with payments likely to approach $18 – $20B in FY 22, it not implausible that Google could revisit its strategy.

Last year, the U.S. Justice Department filed an antitrust lawsuit against Google, claiming the Mountain View-based company has used anticompetitive and exclusionary practices in the search and advertising markets to maintain an unlawful monopoly. One of the main complaints against Google is its deal with Apple that allows Google to be the default search engine on Apple's Safari browser and other search tools.

Last year, Sacconaghi argued Apple should purchase a search engine outright to put pressure on Google. Sacconaghi's reasoning was that Apple doesn't have many alternatives to Google, with its only leverage being a swap to Bing. However, the analyst also warned that such a move could trigger regulatory oversight that could ultimately block the acquisition, putting Apple in a worse position than before.

Speculation mounted in 2020 that Apple was planning to launch its own search engine, after increased activity was noted from its web crawler, but the uptick was later put down to Apple's efforts to improve Siri and Spotlight search results, and the rumor has so far come to nothing.

Tag: Google

Top Rated Comments

macintoshmac Avatar
3 weeks ago
Privacy is at the heart of Apple. All 15 billion beats.
Score: 44 Votes (Like | Disagree)
Agit21 Avatar
3 weeks ago
Switched to DuckDuckGo and couldn’t be happier.
Score: 36 Votes (Like | Disagree)
TheAustrianGuy Avatar
3 weeks ago
As much as I hate Google and especially their business model, its search engine is the only usable one.
Save your money, people will switch to Google search anyway.

I tried Bing, I really tried DuckDuckGo.
It was only one thing: Frustrating.
Score: 25 Votes (Like | Disagree)
vagos Avatar
3 weeks ago

Speculation mounted in 2020 that Apple was planning to launch its own search engine ('https://www.macrumors.com/2020/08/27/apple-search-engine-speculation/'), after increased activity was noted from its web crawler, but the uptick was later put down to Apple's efforts to improve Siri and Spotlight search results, and the rumor has so far come to nothing.
If we judge by the way Apple music handles search then it's better that they didn't build a search engine after all!
Score: 19 Votes (Like | Disagree)
sinoka56 Avatar
3 weeks ago
$15 Billion is the price Apple accepts to sell users' search privacy (of those that don't use other search engines).
Score: 13 Votes (Like | Disagree)
duanepatrick Avatar
3 weeks ago
It could be the default but I will still stick to Brave browser and duckduckgo as my search engine. :cool:
Score: 12 Votes (Like | Disagree)

Top Stories

iu

U.S. Government Files Antitrust Lawsuit Against Google for Search Engine Dominance

Tuesday October 20, 2020 3:36 pm PDT by
The United States Justice Department today filed an antitrust lawsuit against Google, claiming the Mountain View-based company has used anticompetitive and exclusionary practices in the search and advertising markets to maintain an unlawful monopoly. "Today, millions of Americans rely on the Internet and online platforms for their daily lives. Competition in this industry is vitally...
iphone search

Report: Apple 'Stepping Up Efforts' to Develop Alternative to Google Search

Wednesday October 28, 2020 2:42 am PDT by
Apple is "stepping up efforts" to develop its own search technology as U.S. antitrust authorities target a lucrative deal between Apple and Google that keeps Google's search engine the default option on Apple devices, according to a new paywalled Financial Times report. In iOS 14, Apple shows its own web search results and links directly to websites when users type queries from the home...
play store google

Multiple U.S. States Sue Google for Violating Antitrust Laws With Play Store Fees

Wednesday July 7, 2021 4:01 pm PDT by
Attorneys general representing 36 U.S. states and Washington, D.C. today levied an antitrust lawsuit [PDF] against Google to challenge Google Play Store fees, reports Politico. The lawsuit was filed in California federal court and is led by Utah, North Carolina, Tennessee, New York, Arizona, Colorado, Iowa, and Nebraska. The states are fighting against Google's plan to require all app...
searchengineoptionsios

Australia Eyes Consumer Impact of Google's Default Search Engine Deal With Apple

Thursday March 11, 2021 5:04 am PST by
The Australian Competition and Consumer Commission watchdog is eyeing a potential probe into pre-installed software and pre-defined "default" choices on mobile devices, including Google being set as the default search engine on Apple devices. In a press release (via ZDNet), the agency is asking for consumer and industry feedback on the state of default settings, pre-installed web browsers,...
google chromebook lifestyle shot

Google Reportedly Developing Own Arm-Based Processors for Chromebooks After Being Inspired by Apple Silicon

Wednesday September 1, 2021 9:36 am PDT by
After unveiling its latest Pixel 6 smartphones with a custom Arm-based Google Tensor chip last month, Google is also developing its own Arm-based processors for future Chromebook laptops and tablets, according to Nikkei Asia. Google plans to roll out its own processors for Chromebooks in around 2023, according to the report. Chromebooks are laptops, tablets, and detachable devices that run...
Google Widgets Custom Backgrounds Feature 2

Google Working on Customizable Widgets With Custom Background and Themes

Monday June 28, 2021 6:43 am PDT by
Google introduced widgets for its iOS and iPadOS app following iOS 14 last fall. Now, Google is looking to give users more creative freedom with their widgets, allowing users to add custom backgrounds and themes. Discovered by MacRumors contributor Steve Moser, code within the Google Search app for iPhone and iPad says that users will be able to "Choose a theme to add color, Google Earth...
google meet

Google Meet Places One-Hour Cap on Group Video Calls for Non-Paying Users

Wednesday July 14, 2021 2:10 am PDT by
Google has brought in 60-minute group video call limits for Google Meet users with free Gmail accounts, according to recently updated support pages (via 9to5Google). The Meet service was originally exclusive to paying G-Suite members, but "unlimited" (up to 24 hour) group calls were made available for free to all users with a Google account in April 2020, in order to see off competition from ...
iu

Google Reportedly Pays Apple $8-12 Billion Per Year to be Default iOS Search Engine

Sunday October 25, 2020 2:59 pm PDT by
The United States Justice Department is targeting a lucrative deal between Apple and Google as part of one of the U.S. government's largest antitrust cases, reports The New York Times. On Tuesday, the Justice Department filed an antitrust lawsuit against Google, claiming the Mountain View-based company used anticompetitive and exclusionary practices in the search and advertising markets to ...
DuckDuckGo vs Chrome Feature

DuckDuckGo Calls Out Google Search for 'Spying' on Users After Privacy Labels Go Live

Monday March 15, 2021 12:06 pm PDT by
Over the course of the last several weeks, Google has been adding App Privacy labels to its iOS apps in accordance with Apple's App Store rules, but it took Google multiple months to begin sharing the information. There was speculation that Google's delay meant that it had something to hide, which DuckDuckGo is leaning into with a new tweet that highlights Google's data collection and calls...
Apple Pay Feature

Australia Continues to Scrutinize Apple Pay Amid Push for Regulation

Monday August 30, 2021 6:31 am PDT by
The government of Australia is considering creating new laws that could more heavily regulate digital payments systems such as Apple Pay, Google Pay, and WeChat Pay (via Reuters). An Australian government-commissioned report into digital payments systems has made a number of recommendations, one of which suggested actively regulating Apple Pay and other similar digital payments services....