Google is estimated to be paying Apple $3 billion to remain the default search provider on the iPhone this year, according to a Berstein report. That number is up from $1 billion just three years ago.
"Court documents indicate that Google paid Apple $1B in 2014, and we estimate that total Google payments to Apple in FY 17 may approach $3B," Bernstein analyst A.M. Sacconaghi Jr. said. "Given that Google payments are nearly all profit for Apple, Google alone may account for 5% of Apple's total operating profits this year, and may account for 25% of total company OP growth over the last two years."
While Google could walk away from its deal with Apple, iOS devices are said to contribute about 50% of Google's mobile search revenue so the arrangement is seen as a win-win for both companies.
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"Court documents indicate that Google paid Apple $1B in 2014, and we estimate that total Google payments to Apple in FY 17 may approach $3B," Bernstein analyst A.M. Sacconaghi Jr. said. "Given that Google payments are nearly all profit for Apple, Google alone may account for 5% of Apple's total operating profits this year, and may account for 25% of total company OP growth over the last two years."
While Google could walk away from its deal with Apple, iOS devices are said to contribute about 50% of Google's mobile search revenue so the arrangement is seen as a win-win for both companies.
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