Guess how much Google is paying Apple this year to remain on the iPhone
Guess how much Google is paying Apple this year to remain on the iPhone.
Google is paying Apple a lot of money to remain the default search engine on the iPhone and iPad this year.
According to research and brokerage firm Bernstein, Google is expected to pay Apple a whopping $3 billion this year. This is a huge increase from the $1 billion Google paid Apple three years ago! The $3 billion licensing fees will contribute a huge portion to Apple's service business, which generated $7.3 billion n revenue in the recent quarter.
"Court documents indicate that Google paid Apple $1B in 2014, and we estimate that total Google payments to Apple in FY 17 may approach $3B," Bernstein analyst A.M. Sacconaghi Jr. said. "Given that Google payments are nearly all profit for Apple, 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."
As Apple's iOS devices contribute about 50% to Google's mobile search revenue, it is unlikely that Google will discontinue the licensing deal as both companies will stand to benefit from this partnership.
Source: CNBC