SIDDHARTH's Blog

There’s Google Maps vs Apple Maps (well, Apple is hardly a rival there). And so on. Yet, Google every year fills the coffers of Apple by giving it billions of dollars. It’s not a “secret” deal as both companies have been open about it. Here we explain why Google pays Apple and the other nitty-gritty around it.

The “key” word -- and not the keyword -- here is ‘default’. Now that could have negative connotations but for both Apple and Google, it’s overwhelmingly positive. Google pays Apple for its search engine to be the default on Safari browser on the iPhone, iPad and Mac. Not just that, any search — Siri, Chrome, Search app — on Apple devices is by default Google search. Google explained in a blog — incidentally called The Keyword — why Apple chooses to do so. “Apple features Google Search in its Safari browser because they say Google is “the best.” In 2018, in an interview with Axios, Apple CEO Tim Cook said that Google has the best search engine in the market.

Back in 2005, the deal was that Google Search would be the default engine on Safari on Mac devices. It wasn’t supposed to be that big a deal (no pun intended) but two years later, the iPhone was launched and the deal continued. In 2010, the iPad was launched and it just got bigger. The more Apple devices were sold, the value of the deal would have naturally grown exponentially.

Lots and lots of money. So much so that a New York Times report stated that is perhaps the single “single biggest payment that Google makes to anyone.” Further, it roughly accounts for 14 to 21 per cent of Apple’s annual profits. The deal wasn’t a secret but the financials came to light when US regulators starting scrutinising the deal. In 2014, it was revealed that Google paid $1 billion to Apple. It has increased handsomely over the years. According to analysts at Bernstein, Google’s annual payments to Apple will touch $15 billion this year. Next year, it is supposed to hit anywhere between $18 billion to $20 billion.