While Apple's services now constitute a large share of the company's quarterly revenue, coming in second after sales of its most popular product, the iPhone, but you may not realize that the largest share of these profits comes from one of Apple's biggest competitors, Google.
Apple and Google
Ironically, Google's archenemy is Apple's biggest customer, pumping billions of dollars into Apple every year until it gets the privilege of being the default search engine on iPhones and iPads, and now a new report indicates that Google's continued possession of this privilege. It could cost it about $15 billion in the current year 2021 and increase to $20 billion next year.
After all, there are over a billion iPhones and iPads in active use and most Apple users don't think much about the search engine they use when they open Safari. The type of data that comes from searches.
Recent stats indicate that Google currently handles over 60.000 searches every second or over 5 billion searches per day. That's a huge amount of data and it's safe to say that most of it comes to Google by default.
Why is Google pushing such a huge number?
Google may be the most famous search engine in the world, but it is not the only search engine. There are powerful search engines that compete with Google and seek to acquire a larger share in the market, such as Bing, which comes in second place. Although the difference between Google and Bing is very large in terms of market share, but that Microsoft's Bing is also trying to get Google's privilege to exist as a default search engine on Apple devices, and it seems that this fear of losing the privilege is what will force Google to pay a higher number, which is $ 15 billion for this year 2021 instead of $ 10 billion last year 2020, And it will increase to $20 billion in 2022, to ensure it stays ahead.
If Google pays the $15 billion for this year 2021, that's 9% of Apple's total profit or arguably roughly 1/10 of Apple's profit coming from just one deal with one of its biggest competitors. It suffices to know that Apple sold 20 billion dollars of Mac devices in 2020, when it comes from Google, as it is expected of 20 billion dollars next year, this means that Apple's income from Google is close to an entire sector in the company, such as Macs.
It is worth noting that Apple is also paying Google to rent space for iCloud data on its servers, but the amount is only $ 300 million, which is a small number compared to $ 15 billion this year and 20 expected next year?
Finally, Google still makes the majority of its money from advertising revenue and also made a record $61.9 billion in revenue, led by the search engine that single-handedly generated $7 billion. Pay all that money to remain the preferred search engine in iPhone devices.