Google reportedly pays Apple $9 billion/year to remain the iPhone’s default search engine
When Apple first introduced the iPhone, the decision to use Google as the default search engine on mobile Safari was essentially a no-brainer. After all, Google was unquestionably the dominant search engine at the time and Microsoft’s Bing wouldn’t even arrive on the scene until June of 2009. Despite increased competition with respect to search over the past few years, there’s no denying that Google is still the best search engine on the planet. That said, Apple has for some time now let iOS users change the default search engine on mobile Safari to Bing or DuckDuckGo.
Google’s prominence in mobile Safari, though, isn’t a benefit Apple bestows upon the search giant free of charge. On the contrary, Google pays a lot of money to enjoy its status as the default search engine on the iPhone and iPad. Hardly a surprise, the bulk of Google’s revenue still comes from search-based advertising and the company has long been willing to pay somewhat astronomical fees in order to remain front and center on mobile Safari.
As to how much Google pays for that privilege, well, that’s an interesting story. The only official number we’ve seen comes from a 2014 court document which revealed that Google at the time was paying Apple $1 billion a year for default search engine status.
Since then, analysts have claimed that the annual fee has jumped considerably, with a report from last year relaying that Google in 2017 paid Apple upwards of $3 billion. That said, Goldman Sachs analyst Rod Hall now claims that Google may be paying Apple as much as $9 billion in 2018 to keep its search engine front and center for iOS users. Keep in mind that Hall’s figure — which was originally brought to light by Business Insider — is nothing more than an estimate as both Google and Apple remain tight-lipped on the issue. In any event, Hall claims that the annual fee Google pays out to Apple is on the rise due to an increase in the number of Google searches that originate via Siri. Looking ahead, Hall writes that Google could end up paying Apple as much as $12 billion in 2019 to keep Google as the default search option.
Hall’s figures seem remarkably high, so you’ll definitely want to take his report with a requisite grain of salt. Either way, the relationship between Apple and Google in this regard is as mutually beneficial as can be. From Apple’s perspective, they’re getting what essentially amounts to free money. And Google, on the other hand, enjoys prime placement amongst iPhone and iPad users who, on average, are more coveted amongst advertisers.
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