Skip to Main Content
PCMag editors select and review products independently. If you buy through affiliate links, we may earn commissions, which help support our testing.

Being Default Search on iPhone Costs Google $3B

50 percent of Google's mobile search revenue is from iOS devices, which makes the huge payment worthwhile.

August 15, 2017
Apple iPhone 7 Plus

For a company not really focused on search engines, Apple collects a huge amount of cash because of them each year. And all that cash comes courtesy of its rival Google.

In a note to investors this week, global asset management firm Bernstein stated that it believes Google will pay Apple $3 billion this year to remain as the default search option on iOS devices. So every iPhone or iPad sold will be set to use Google for search unless users take the time to pick an alternative. The majority never do.

Google only paid $1 billion for being default search back in 2014, so the cost has tripled, but then mobile as a sector continues to grow. According to Statista, Apple sold 169 million iPhones worldwide in 2014. In 2015 that increased to 231 million and remained higher in 2016 at 211 million.

According to Bernstein analyst A.M. Sacconaghi Jr., the payment Google makes to Apple is almost pure profit for Apple, and that, "Google alone may account for 5% of Apple's total operating profits this year, and may account for 25% of total company OP growth over the last two years."

With iOS devices accounting for 50 percent of Google's mobile search revenue, it seems unlikely the company will decide to stop paying Apple. However, in the future Google may take a chance, decide not to pay and see what Apple does. It may be the case that Apple continues to use Google as default search because it is so popular.

The licensing deal is viewed as a win for both companies. Apple gets a nice chunk of cash for setting a default, while Google benefits greatly from the search revenue generated on iOS. And let's not forget, Google's revenue last year was close to $90 billion. $3 billion is small change.

Apple Fan?

Sign up for our Weekly Apple Brief for the latest news, reviews, tips, and more delivered right to your inbox.

This newsletter may contain advertising, deals, or affiliate links. Subscribing to a newsletter indicates your consent to our Terms of Use and Privacy Policy. You may unsubscribe from the newsletters at any time.


Thanks for signing up!

Your subscription has been confirmed. Keep an eye on your inbox!

Sign up for other newsletters

TRENDING

About Matthew Humphries

Senior Editor

I started working at PCMag in November 2016, covering all areas of technology and video game news. Before that I spent nearly 15 years working at Geek.com as a writer and editor. I also spent the first six years after leaving university as a professional game designer working with Disney, Games Workshop, 20th Century Fox, and Vivendi.

Read Matthew's full bio

Read the latest from Matthew Humphries