Google Could Pay Apple $1B Next Year To Remain Default Search Engine On iOS
Google Could Pay Apple $1 Billion Next Year To Remain Default Search Engine On iOS, Report Says | TechCrunch

		
		Apple and Google are enemies and partners at the same time due to asymmetric competition. According to a report from Morgan Stanley, Google could pay more than $1 billion in 2014 to remain the default search engine on iOS. In 2009, Google paid only $82 million for the privilege. Analyst Scott Devitt believes that it is a per-device deal growing every year.
According to the report titled “The Next Google Is Google” and the table below, the total traffic acquisition cost is somewhat proportional to the number of iOS unit sales, with a traffic acquisition cost rate slowly going up from $3.2 per unit last year to an estimated $3.3 per unit this year and $3.5 per unit next year. That’s why the total traffic acquisition cost is going to increase in the coming years if iOS sales keep growing.






To put it into perspective, the Mozilla Foundation should get $400 million in 2014. Google remains the main contributor to the organization as one can read in Mozilla’s reports. Opera is another longstanding partner, but Morgan Stanley doesn’t give figures for this deal.
Over the years, Apple has gotten more revenue from Google as Microsoft has been pushing very hard and bidding to make Bing the default search engine. For example, Bing is now the default provider on Nokia and BlackBerry devices. Money is a major incentive for Apple. But selling a Google-free iPhone could dictate the company’s next move.
Yet, Apple shouldn’t shy away from $1 billion. As a company, profit is the most important metric. Google provides an easy way for the company to cash in a significant sum of money every year. At the same time, Google pays more money to Apple than it directly generates from iOS users. But user data is worth a lot. With only $2.9 billion in profit last quarter, it’s a non-negligible way to affect Google’s bottom line.
But the smartphone space evolves very rapidly. As Samsung is now the dominant manufacturer, the Apple-Google deal could peak soon. Google will watch closely how market shares change and could end the deal or lower its terms at the first opportunity.



		

		
		
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		Romain Dillet is a Senior Reporter at TechCrunch.

He has written over 3,000 articles on technology and tech startups and has established himself as an influential voice on the European tech scene. He has a deep background in startups, privacy, security, fintech, blockchain, mobile, social and media.

With twelve years of experience at TechCrunch, he’s one of the familiar faces of the tech publication that obsessively covers Silicon Valley and the tech industry. In fact, his career started at TechCrunch when he was 21. Based in Paris, many people in the tech ecosystem consider him as the most knowledgeable tech journalist in town.

Romain likes to spot important startups before anyone else. He was the first person to cover N26, Revolut and DigitalOcean. He has written scoops on large acquisitions from Apple, Microsoft and Snap.

When he’s not writing, Romain is also a developer — he understands how the tech behind the tech works. He also has a deep historical knowledge of the computer industry for the past 50 years. He knows how to connect the dots between innovations and the effect on the fabric of our society.

Romain graduated from Emlyon Business School, a leading French business school specialized in entrepreneurship. He has helped several non-profit organizations, such as StartHer, an organization that promotes education and empowerment of women in technology, and Techfugees, an organization that empowers displaced people with technology.	



	
	
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