Google set to pay Apple $3 billion to remain default search engine

Published 15.08.2017 13:55
emAP Photo/em
AP Photo

Google will pay tech giant Apple $3 billion to remain the default search engine across all iOS devices, research and brokerage company Bernstein said Monday.

According to Bernstein analyst Toni Sacconaghi, Google will shell out triple the amount the company paid Apple three years ago.

"Court documents indicate that Google paid Apple $1 billion in 2014, and we estimate that total Google payments to Apple in FY (financial year) 17 may approach $3 billion," Sacconaghi was quoted as saying by CNBC.

Google's licensing fees reportedly make up a large bulk of Apple's services business, Sacconaghi said.

"Given that Google payments are nearly all profit for Apple, Google alone may account for 5 percent of Apple's total operating profits this year, and may account for 25 percent of total company OP growth over the last two years," the analyst added.

Sacconaghi also outlined the advantages and disadvantages of Google paying the iPhone producer.

He believes the world's most popular search engine might decide not to pay if it felt confident that Apple would set it as default regardless of payment.

However, Apple devices make up as much as 50 percent of Google's mobile search revenues. Such a state of affairs could simply convince Google to reinsure itself and take the licensing deal, Sacconaghi said.

Share on Facebook Share on Twitter