Google pays Apple $3bn to remain default search engine on iOS devices

Doris Richards
August 16, 2017

The Korean tech giant receives fees depending on Google's advertisement earnings from the preinstalled app. JoongAng Ilbo, a local news daily, estimated the amount could reach to some 4 trillion won (US$3.5 billion) this year.

Google will pay Apple almost $3 billion (roughly Rs. 19,276 crores) this year to remain as the default search engine on iOS devices, US-based research and brokerage firm Bernstein has said.

"Negotiations to renew the contract are ongoing", the Samsung spokesman said, without elaborating on details.

"While Android is free for manufacturers to use, it's costly to develop, improve, keep secure, and defend against patent suits", Google said in a note responding to an inquiry. As pointed by BGR, this is essentially because Google pays Apple a lot of money for the same. The smartphone maker has the largest market share in the world. This information was revealed by court documents.

According to a note from the research and brokerage firm to investors on Monday, Google has increased the amount from $1 billion three years ago to $3 billion this year, and Google's licensing fees make up a large bulk of Apple's services business. This license fee from Google comprises about 5% of Apple's total operations profit. When Apple executives talk about Services, they like to focus on the fee Apple collects from software sold on the App Store, or the money they make through subscriptions like Apple Music.

On the other hand, Sacconaghi said that Apple's iOS devices contribute about 50 percent to Google's mobile search revenue, which means Google might be too afraid to walk away from its licensing deal with Apple.

Other reports by Iphone Fresh

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