For iOS users out there, here’s an interesting question for you: if Google was not the default search engine when you use Safari, would you be bothered to navigate over to Google’s website or use the Google app, or would you just use whatever was the default search? Loyalists might actually bother to go to Google’s website, but that’s a chance that Google can’t afford to take.
So much so that according to recent estimates from Goldman Sachs, Google has paid Apple as much as $10 billion to ensure that Google remains the default search engine on Safari. This works out great for Google because it ensures that even iOS users are directed to Google’s services, and it is also great for Apple as the money helps pad their services segment which some believe will become a huge source of revenue for the company in the future.
According to analysts, “Not only is TAC large but it is still growing as people search more on mobile devices. Combining our TAC work with app store data from Sensor Tower we conclude that TAC and Apple’s share of app store downloads represented 51 percent of Services revenues in 2018 and an even larger 70 percent of Services gross profits. Both of these elements should grow in 2019 albeit TAC looks likely to decelerate materially.”
This is not the first time that we’ve heard that Google has paid Apple obscene amounts of money to remain the default search engine. Whether or not Apple will be looking to increase the price in the future remains to be seen, along with whether or not Google thinks it will be worth it to keep paying Apple that much money.