It may be hard to find two companies in the tech world that compete as fiercely as Google and Apple, but recent reports indicate they share a unique, symbiotic relationship.
Google pays a substantial amount of money every year to remain the default search engine on Apple’s Safari browser.
How much money? The exact figure isn’t publicly known, but it could be as high as $3 billion per year. This information surfaced following a Bernstein report.
What is known, according to a court document referenced in the report, is that Google was paying $1 billion per year in 2014 to be the default search engine on iOS.
Bernstein analyst Toni Sacconaghi suggests that this number has increased to $3 billion due to several factors.
Since then, mobile traffic and sales of iOS devices have grown. Apple holds 18% of the smartphone market, positioning it as the world’s leading smartphone vendor.
Furthermore, Apple’s revenue from licensing has increased, as have Google’s traffic acquisition costs.
Taking all of this into account, it is believed that Google will be paying Apple up to $3 billion by the end of 2017 to retain its status as the default search engine on Safari.
Historically, Apple has shown it is not hesitant to replace Google services as iOS defaults. In the past, iPhones came pre-installed with YouTube and Google Maps.
Nowadays, these apps need to be downloaded from the App Store, and Apple has since launched its own Maps service.
Given this context, it seems probable that Google will continue to pay Apple large sums of money to remain its default search engine for the foreseeable future.
Some analysts predict that this amount will continue to grow year after year.
