Google and Apple are rivals in many areas, primarily facing each other in the iOS vs. Android debate. But companies may also be contributing directly to each other’s balance sheets. For example, it is claimed that Apple and Google have an agreement that ensures that Google remains the default search engine on Apple’s iOS devices, and within the scope of this agreement, Google pays a large amount to Apple every year. So how much of a payment is being talked about?
DOES GOOGLE PAY A FORTUNE TO APPLE EVERY YEAR?
Although neither company disclosed any amount regarding the claim in question, The Register reported, based on a report by analyst firm Bernstein, that Google is paying Apple between 18 billion and 20 billion per year to remain the “dominant search engine on iPhone.” It pays between billions of dollars.
It is reported that this comment was made in the context of the Information Services Agreement (ISA) between Apple and Google, which the US Department of Justice is investigating as part of an antitrust case against Google.
“IT ACCOUNTS FOR 14-16% OF APPLE’S ANNUAL OPERATING PROFIT”
According to the news from Android Authority;
While the report in question states that there is a possibility that the federal court will rule against Google and force it to terminate its search agreement with Apple, it is said that this agreement accounts for 14-16% of Apple’s annual operating profit. In Google’s financial reports, it is stated that 22% of the total advertising revenue is paid to traffic acquisition costs.
Bernstein states that Apple could get 40% of this 22% (calculated as 8.8% of Google’s total ad revenue).
“REVENUE THAT APPLE WILL ACHIEVE IN 2022…”
It is said that Google will earn $222.47 billion in revenue from ads in 2022, which shows that Apple’s revenue in 2022 is approximately $19.5 billion.
It is reported that the numerical value of the ISA varies depending on who you ask, and the US Department of Justice thinks that Apple received approximately $10 billion from the ISA with Google, but the report states that this figure came from external sources.
If the federal court rules against Google and forces it to terminate the ISA, Apple could absorb other search engines like Microsoft’s Bing and even seize the opportunity to launch its own search engine. However, a decision in Google’s antitrust case is not expected anytime soon. Comments are being made that are vague and suggestive that the decision may come in 2024.