In Apple's own Safari browser, the default search engine has always been a point of contention from the big search giants. The latest report, published by Bernstein analyst Tony Sacconaghi of the investment bank, says that Google may pay Apple $15 billion this year to keep Safari as the default search. That's 50% more than last year's $10 billion.
Moreover, next year this fee will increase to 18-20 billion dollars. This estimate uses information from "disclosures in Apple's public archives, as well as a bottom-up analysis of Google's TAC (traffic acquisition cost) payments."
Tony Sacconaghi claims that Google will provide an advantage over Microsoft in tenders. However, in the future, this fee will have two risks: one is a regulatory risk, and the other is that Google will consider the deal worthless.
His words:
“We see two potential risks to GOOG's payments to AAPL:
(1) regulatory risk, which we believe is real but likely in a few years, we see a potential 4-5% impact on Apple's gross profit from an adverse decision;
(2) that Google decides to stop paying Apple to be the default search engine altogether, or tries to renegotiate the terms and pay less. In a previous study, we noted that GOOG is likely paying to avoid being overtaken by Microsoft. However, taking into account the fact that in the 22 fiscal year the payments may approach 18-20 billion dollars, it is possible that Google may reconsider its strategy.
Google Search is the most popular search engine in the world
According to recent reports, in the UK market alone, Google paid Apple $1,5 billion last year to secure a search engine position in the Safari browser. In the field of search, Google has reached agreements with many major mobile phone manufacturers, such as Apple. Under the agreement, Google Search will pay these partners a portion of search advertising revenue in exchange for having Google's default search engine on the device.
For years, Apple has been heavily criticized for keeping this search engine as the default on iPhones, iPads, and Macs. However, the company has an explanation for this action. According to Jane Horvath, Apple's senior director of global privacy, despite privacy concerns, Google Search is currently the most popular search engine.
Of course, we know that many users will want to see what they know. Almost everyone already knows this search engine. Jane Horvath adds:
"Now Google is the most popular search engine. We support Google, but we also have built-in support for DuckDuckGo, and we recently rolled out support for Ecosia as well.”
