Having the second largest market share in the smartphone market affords Apple not only serious bragging rights but, as it turns out, it’s also an avenue for some very lucrative deals when it comes to selecting which third-party services work as defaults on Apple devices.
From $1 billion in 2014 to $3 billion last year, Apple has been able to demand increasingly larger sums from Google over the years for the privilege of having its search engine as the default in Safari on iOS. However, a new report suggests that Apple may be reaching for the stars this time around with a massive threefold increase in its fee.
Goldman Sachs analyst Rod Hall suggests the company may be looking to ask Google for a whopping $9 billion dollars in order to renew its deal for this year, a sum that he suggests may increase to $12 billion in 2019.
It’s unclear if Google’s supplanting Microsoft as the default search provider for Siri and Spotlight last year is responsible for the purported price hike from Apple, though it may, at least partially, explain the sudden jump. The other explanation could be that previous estimates of the value of the agreement between the two tech giants were undervalued, given that apart from the $1 billion figure from 2014, we don’t really have any hard evidence pertaining to the actual sum of these payments.
Hall does indicate that “Apple is one of the biggest channels of traffic acquisition for Google’ and despite the high cost, it is quite likely that Google will agree to pay the increased sum.
Source: Business Insider (Paywall)