Google will be paying Apple $15 billion USD to remain the default search engine on iPhone, iPad, and Mac in 2021.
A new report from Ped30, Google will pay as much as $15 billion USD to Apple this year, in order to remain the default search engine across the Apple ecosystem, which includes several devices such iPads, Macs and especially iPhones. The amount is a 50 percent rise over what it was in 2020.
As to why Google is willing to pay so much money to its rival, the note also suggests that the search giant is “likely paying to ensure Microsoft doesn’t outbid it.”
“We now estimate that Google’s payments to AAPL to be the default search engine on iOS were ~$10B in FY 20, higher than our prior published model estimate of $8B,” reads the note. “Recent disclosures in Apple’s public filings as well as a bottom-up analysis of Google’s TAC (traffic acquisition costs) payments each point us to this figure…”
“We now forecast that Google’s payments to Apple might be nearly $15B in FY 21, contribute an amazing ~850 bps to Services growth YoY, and amount to ~9% of company gross profits.”
Jane Horvath, Apple’s senior director of global privacy, said earlier this year that the company defaults to Google because it’s the most popular search engine. And Safari allows you to switch from Google to another search engine if you choose.
The dilemma for Google is whether paying billions of dollars is actually worth it. If Bing replaced it as the default search option, wouldn’t users simply switch to Google anyway? Most of them likely would, but some wouldn’t, which is an instant loss of users Google clearly isn’t willing to suffer.