The Google and Apple Arrangement
How can Google remain the top search engine year after year? Easy, it pays Apple big bucks to ensure it remains the default search engine on Mac, iPad, and the iPhone. This week, analysts from Bernstein have estimated that payments from Google to Apple may be close to $15 billion in 2021, up from $10 billion in 2020, only one year earlier.
Google’s Payment Trail
The payment trail from Google to Apple over its strategy to remain the world’s top search engine was identified by PED30, “Bernstein says Google’s FY21 payments to Apple might reach nearly $15B“, on August 25, 2021, in an investor memo. The memo further identified that analysts estimate that the price tag from Apple for Google to maintain its marketplace search engine dominance will rise from $15 billion in 2021 to $20 billion in 2022. This information is based in the “disclosures in Apple’s public filings” section of the memo and through inductive reasoning by analysts who reviewed the filed financials.
Toni Sacconaghi, a Bernstein analyst thinks that Google is probably paying Apple this kingly sum, “to ensure Microsoft doesn’t outbid it.” Sacconaghi highlighted two potential risks that could ultimately end the Google to Apple payments. Inasmuch as lawmakers could enact new regulations to limit these kinds of market dominance dealings, Google could at some point walk away from its arrangement with Apple if it deemed it to be no longer worth the money.
#ElaineAllan, BA, MBA
Technology and Business Blogger
#Vancouver, BC, Canada