Google paying Apple but why? -


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Tuesday, 15 August 2017

Google paying Apple but why?

Apple will not say what the exact number is, but Google pays a substantial amount of money to remain the default search engine on the iPhone and iPad. A new analysis by Bernstein analyst Toni Sacconaghi estimates that Google may be paying Apple more than $ 3 billion a year .

According to that estimate, Google could account for 5% of Apple's total operating profit this year and up to 25% of total operating profit growth recently, according to Bernstein's research.

The only difficult number we know is that Google paid Apple 1 billion in 2014. That amount, specified in court documents, was paid as part of Google's agreement to pay Apple a percentage of the money Google earns from iPhone users And iPad. The percentage is unclear, but Bernstein cited media reports putting the agreed percentage at 34% .

Recently, Apple has focused the attention of investors on its line of services, which could amount to 13% of Apple's total revenues this year. 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 the company makes through subscriptions like Apple Music .

But Bernstein inquired through Apple presentations and found that license revenue, such as that paid by Google to Apple, is actually the largest or second largest contributor to service growth. Because of this, he believes that Google will pay Apple nearly 3 billion this year.

The analysis began with the payment of a billion dollars in 2014 and then extrapolated to Google or Apple's growth in the relevant line items in the three years since .

Bernstein points out that any money that Google pays Apple is positive and would be a sign of the good symbiosis between both . And unless Google changes the deal, Apple is willing to pick more and more checks each year as it gains users.

Bernstein analysts even see the possibility that Apple could double licensing revenue by selling the placement of applications on the iPhone, which could be profitable especially if Apple offered to make predetermined applications within iOS , such as Or Facebook instead Snapchat or Twitter, or Google Maps instead of Mapquest or WeChat instead of Line.


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