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Google will reportedly pay Apple $15 billion to maintain search dominance on iOS

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What you need to know

  • A new investment note from Bernstein analyst Toni Sacconaghi claims Google may pay nearly $15 billion to be the default search engine on Apple devices in FY 2021.
  • Google is believed to have paid $10 billion to dominate search on iPhones and other Apple devices last year.
  • The note suggests Google is paying so much money to ensure "Microsoft doesn't outbid it."

As per a new research note by Bernstein analyst Toni Sacconaghi, Google might pay nearly $15 billion to Apple this year to continue dominating search on Apple products (via Ped30). The figure is based on "recent disclosures in Apple's public filings and a bottom-up analysis of Google's TAC (traffic acquisition costs) payments."

In October last year, the Justice Department alleged that Google had paid Apple between $8 to $12 billion to clinch the default search status on iPhones and other Apple devices.

Sacconaghi believes that Google is likely paying more to "ensure Microsoft doesn't outbid it." However, there is a small possibility of Google revisiting its strategy soon, as payments might approach between $18 to $20 billion in 2022. It may choose to renegotiate terms with Apple to pay a lower fee. There's also the risk of regulators blocking similar deals between the two companies, but it is apparently unlikely to happen anytime soon. If such a ruling comes to pass, Sacconaghi expects a "potential 4-5% impact to Apple's gross profits."

During a roundtable discussion earlier this year, Apple's senior director of global privacy, Jane Horvath was asked why the company uses Google as the default search engine on iOS. Horvath responded by saying Apple supports Google as it is the most popular search engine, but users can easily change to DuckDuckGo, Ecosia, and other alternatives.

A coalition of 38 states filed an antitrust lawsuit against Google in December for "unlawfully restraining trade and maintaining monopoly in general search services." The lawsuit further alleged that Google's practices have harmed consumers, advertisers, and "the competitive process itself." Except for China and Europe, Google is also the default search engine on most Android devices — including the best cheap Android phones.

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Babu Mohan
Babu Mohan
11 Comments
  • Pay to play should be illegal
  • Nothing like watching 2 monopolies stake out where the boundaries will be
  • I'd use Google even if Apple didn't make it the default search engine.
  • I would not use Google search if you paid me to.
    They are no longer an organic search and I've proved it to myself over and over again.
    You get the manipulated results Google wants you to see. I use Bing and DuckDuckGo.
  • I've found Bing to be surprisingly good. I do engineering around construction projects and Bing performs great for looking up part numbers and technical details
  • lol 15 billion is like throwing a penny into a fountain to Google.
  • So Apple can make $15+ Billion on advertising, without actually being one of those horrible companies that makes money on advertising.
  • Apples never really been anti tracking, they just prefer to get their vig for whatever tracking happens
  • Sven said it best. So true....
  • So either pay up or it's...Bing!
  • Pay to be dominate, but lose when the owner of the phone jumps to a better search engine. I would rather wrestle a grizzly naked than use google for searching or for a browser.