Apple makes billions from Google Search each year

[jws]

To put that back into relatable numbers, there are about 1B installed iOS devices. So Google is paying $9/year for each device to be the default search engine.

[derrasterpunkt]

It was 1B in 2016, the most recent number is 1.4B active devices[0]. So that would make it $6.71.

[0] https://www.theverge.com/2019/1/29/18202736/apple-devices-io...

[liamcardenas]

Interesting, it's also important to keep in mind that (1) this number is slightly higher per user because some people have multiple iOS devices and (2) given the device price points, iOS users are typically considered more valuable than the average person.

[luckylion]

Are those all capable to run the latest version / receive updates? Otherwise, they're paying even more per device.

[TheSoftwareGuy]

does the $9.4B figure include mac devices?

[SilasX]

And I can make those nine dollars go straight into the trash by changing the search engine to DDG in the settings.

[nkingsy]

My question is, would Apple default to different search engine if they weren't getting paid? Given Google's utter dominance in search, it would likely be seen as anti-user behavior to default to something else.

This one and the fact that Microsoft takes all the licensing revenue from Android seem to bubble up every few months. Head-scratching stuff from companies playing on levels of scale where strange things start to make sense.

[Despegar]

If they weren't getting paid they'd just switch to Bing or DuckDuckGo. As much as Google might like to believe that people will specifically seek them out because they are a better product, search is a utility and most people will be fine with Bing/DuckDuckGo. We know this exactly because Google pays TAC.

[e1ven]

Apple had previously used Bing as the default search in certain areas, such as Siri and the Search bar.

[Veelox]

If they could not receive any kind of payment or kickback from any company I would give it a 70% chance they pick Google. As it stands, Apple knows that it can charge Google and Google knows its worth paying so they stay in the mutually beneficial relationship.

[solarkraft]

I think Apple has the power to establish a competitor - After all most searches are simple and DuckDuckGo well satisfies those. I stil seek out Google every once in a while, but how many users will go through the trouble to change the default, especially when you have !g?.

My next question is even if they do lose on search, with all their very successful "side" businesses, how much would it impact them at this point?

[max76]

Google's market share is slightly more than 3/4 of all search [0]. They have a strong majority of all searches, and they dominant some submarkets of search, but they are far from total market dominance.

https://www.netmarketshare.com/search-engine-market-share.as...

[tonmoy]

That is about 7% of google’s 2018 revenue! It is 30% of google’s net operating income!!

[wmf]

I looked it up: "Cost of revenues was $59.5 billion, consisting of [traffic acquisition cost] TAC of $26.7 billion and other cost of revenues of $32.8 billion. Our TAC as a percentage of advertising revenues was 23%." So yeah, you have to spend money to make money. https://www.sec.gov/Archives/edgar/data/1652044/000165204419...

[josefresco]

Apple is sure concerned about privacy of their users until the Google dump truck full of cash arrives. Apple isn't the one tracking you everywhere but they're happy to sell access (to you) to someone who does!

[r00fus]

Wait a minute. Google is the market leader in search. Apple offers/highlights DDG, Bing and other engines, but many folks want Google.

[fitzroy]

It can be changed to another search engine without even opening Safari.

[pcprincipal]

The concept of owning demand is explored really well in this blog post[1]. A good excerpt:

> In short, if somebody successfully inserts themselves between you and your customer, they can exercise tremendous control over you, including taking a big chunk of your profits or outright killing you.

[1] https://florentcrivello.com/index.php/2018/10/22/own-the-dem...

[resters]

I would love to know how google determines the value of being the default search engine... estimating it is required to agree to the fee structure.

[Hernanpm]

interesting, that is the price to stop apple create its own search engine.

[reaperducer]

interesting, that is the price to stop apple create its own search engine.

Launching, perhaps. Creating? No one knows.

Maybe one day when Google decides it doesn't need Apple anymore, Tim Cook will pull a "One more thing..." at WWDC.

[netdur]

There's absolute no way they can do, the search engine is very very expensive to operate, to be successful you have to be better than Google and that require none existing technologies (such quantum storage).

edit: Google is not doing the best at searching, they are doing the best by budget current economy allows, to be better than Google you have to cut cost of operation in very dramatic way, so you can expand the beyond where Google stands now, other than that, you can't outperform Google.

[Theodores]

In Apple's reporting where they don't have the breakdown in iPhone sales any more there is talk of revenue from other services going up. Maybe this is part of that success story.

[eugeniub]

Meanwhile DuckDuckGo (probably valued at under $50 million) is worth less than 1% of that fee. No wonder Google continues to retain a monopolistic market share.

[bduerst]

DuckDuckGo is basically a reskin of Bing search (unless you search in Russian, then it's Yandex). Their value-add is minimal, even if you trust them to respect privacy, despite not being open-sourced or audited.

DDG isn't a search engine in the same way Bing and Google are.

[wuliwong]

That seems like a really low estimate but I have no clue what DDG is currently valued at. They raised $10 million recently but after a little search I wasn't able to see at what valuation they raised the money at.

[ucaetano]

Well, Google isn't the one putting it up for sale.

Apple could easily add a user choice prompt, where users can pick from the top 3 search engines in a country.

But I guess they like that $10B very much.

[aboutruby]

They must negotiate very well because as an iOS user I would be disappointed to not have Google as default (like when Firefox switched to Bing).

[eugeniub]

It would be hard to imagine actually be disappointed that my preferred service is an option, but not the default. I use few of the defaults on my phone.

[ronsor]

I thought Firefox switched to Yahoo

[JohnJamesRambo]

Quite a cost to pay for a generation of people that don't know how to set a default search engine.

[2019ideas]

This is the biggest benefit of Apple users.

[bgdnyxbjx]

Interesting. That’s like more than the entire yearly revenue of Bing.

[wmf]

The users get to use a pretty good search engine.