Did you know Google pays billions of dollars to Apple just to remain the default search engine on their iPhones, iPads, and Macs?
According to sources, Google does this because they earn through advertisement services more than all other services and products combined! And Apple users consist roughly 20% of all the mobile users in the world (2021 stats). While the percentage is 20%, this user base is the richest and highest spenders when it comes to making purchases online.
Suppose Bing (Microsoft search engine) takes over Apple devices to become the default search engine. In that case, this will impact Google advertising and other services revenue in billions. Hence, Google continues to pay Apple billions to keep you away from Bing and other search engines!
The future (from Google’s perspective)
As per the reports and leaks, Google seems to have absolutely no issues in continuing the trend. The company plans to keep sending cheques filled with several billions of dollars to continue collecting Apple user's data to continue attracting other companies for advertisement.
While Google pays billions to Apple, it does something similar to other smartphone-making companies. The amount is relatively low (not even close to Apple, even when all manufacturers’ payment is combined), but they too receive payment to keep Google services default even before the mobiles are bought.
But we get it; that’s how it works.
Suppose another company doesn’t offer a particular service. In that case, a different company pays them to earn much more from its user base. Bernstein analysts claim Google increased this amount from 10 billion to 15 in 2021, and this trend is highly likely to go up to 18 or even 20 billion in the year 2022.
What do Apple officials have to say?
Apple’s senior director for global privacy, Jane Horvath backed this “understanding” by stating last year that Apple does this because Google remains the most used search engine by their user base. And is highly integrated with the basics of the digital world.
He also stated users will always have the option to change the default search engine from Google to any other provider on the Safari browser.
The future (from Apple’s perspective)
It’s difficult to cut out 5% of your annual profit (especially when you’re not spending even a single penny in generating this income). Google and Apple seem to be developing a symbiotic relationship from the results of this deal (a win-win situation for both tech giants). Apple’s revenue line has increased year by year from this deal and is likely to increase by 5 billion in the year 2022.
But considering the level of antitrust Google is developing year by year, several analysts believe Apple may, at some point, see this as a regulatory risk on their “privacy is fundamental human right” philosophy.
Regulations and criticism so far?
Whenever one or more companies try to control the free market, we always get to see some kind of regulations from the government bodies to protect the free market or to protect the interest of other small-scale businesses. Do you see this deal from Google and Apple as one such market domination/manipulation? If not completely, this might still be a partial market dominance/monopoly.
This deal of two tech giants has already received criticism in the past for search engine dominance. Competition and Marketing Authority from the UK expressed their views and concerns on this deal by saying “this deal creates a significant barrier to entry and expansion” for the search engine rival companies.
The story doesn’t end here, Apple is reportedly working on launching their own search engine. This move could possibly be to stop Google's dominance on Apple, or to expand the Apple ecosystem, or simply due to the fear of possible future regulations Apple may face!
This will also mean Apple will stop receiving millions of dollars which Apple is receiving for doing absolutely nothing right now. But smart companies always keep a check on the expansion of other business giants and possible hurdles due to regulations. That’s what we call a foreseer who can eliminate a threat even before the threat shows up!
In a way, the pact between Apple and Google is quite sarcastic. Apple, on one hand, preaches about privacy and the importance of restoring users' data whereas on other hand Google makes around 90% of its income from selling data and advertisements.
So, will this partnership stay intact for a long time? Why not. Both the companies are benefiting from it. So, yes no matter how many angry tweets you might see from Google or Apple against each other. They are partnering firms that fund and sustain each other in numerous ways.
And it's this rivalry yet closeness and dependency that helps both Apple and Google to flourish.