Google pays Apple $3bn to remain default search engine on iOS devices

Remigio Civitarese
Agosto 16, 2017

Google has confirmed in the note to investors that it will increase the amount from $1 billion to $3 billion for this year.

Samsung has already been receiving an undisclosed amount of commission fees from Google, which has been capitalizing on advertising income from various default Android apps, including the Google search engine, from the early days of the Galaxy smartphone, according to a Samsung spokesman.

Apple has increasingly highlighted its services business for the core growth of the company.

Apple has been touting its services business as a quickly growing segment of the company, noting that it expects that branch alone will soon be as large as a Fortune 500 company.

Apple's iOS devices contribute about 50 percent to Google's mobile search revenue, Sacconaghi noted, which would mean the company may just be "too scared" to step away from the deal despite the payment.

Following the rise of Android OS, Google locked horns with Apple in the mobile phone market and is largely coming out on top as far as sales are concerned.

The court documents show that Google is paying $1 billion to Apple as licensing fee. Google is increasing the fee because it does not want to cancel the license.

But in order to stay the default search engine on Apple's iPhone and not to lose their spot to other services like Spotlight Search, Siri and Bing, the search engine giant might pay $3 billion.

Google accounts for 95 percent of mobile search traffic in the US.

"Given that Google payments are almost all profit for Apple, Google alone may account for five per cent of Apple's total operating profits this year, and may account for 25 per cent of total company OP growth over the last two years", he added.

Apple posted $45.4 billion in revenues for the third quarter with a seven percent year on year growth.

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