The Apple Fee: Google Has Paid $9 Billion To iPhone Maker In 2018

Must Read

Superstitions across different countries – An Overview

Some believe that a superstition is anything that people believe that is based on myth, magic, or irrational thoughts. They are beliefs that are steeped in lore or tradition, and it is usually difficult to pinpoint the exact origin. Here is a brief compilation of Superstitions which are prevalent across different countries.

1.5 Million Engineers Pass Out In India Every Year, Fewer Getting Hired [Trends]

Engineering colleges have been springing up like wild mushrooms in India in the last few years. Their number has...

World’s Most Popular Ad Slogans: A Brief List To Inspire With !

Advertisement plays an important role for companies as well as consumers world wide. It gives a seller an opportunity...

Apple Inc. (NASDAQ:AAPL) usually demands a lot of investment from its millions of ultra-loyal users across the globe. This has attracted the eyeballs of many other companies who have set their eyes on the captive user base of the world’s most valuable company. This statement was again reinforced when it was recently reported by Research firm Goldman Sachs that Google (Alphabet Inc. (NASDAQ: GOOGL)) paid Apple a reported $9 billion in 2018 to secure its position as Apple’s default search engine.

For people who have heard about this for the first time, this isn’t the only instance of the reporting of this deal. Details of this deal have been known for some time now. However, no particular proof of the full transaction is available as of now. The only reported deal of which evidence is available is one from four years ago. Back in 2014, Google paid Apple a total sum of $1 billion to remain as their default search engine on their devices, especially iPhone. But how exactly did the fee, which was whopping $1 billion back in 2014, turn into an even more humongous $9 billion in the span of 4 years?

The answer lies in Google’s financial growth. In 2017, Bernstein’s analysts reported that Google’s mobile revenues more than tripled in between 2014 and 2017. The figures indicate that the increase is from $16 billion in CY’14 to $50 billion in CY’17. Since the revenues increased, so will the fee commanded by Apple, who accounts for a sizable share of worldwide smartphone userbase. Thus, as Google’s fee to Apple is directly linked to Google’s mobile revenue earnings, the fees also seem to be increasing along with the revenues. This explains the steady increase in payment over such a presumably short amount of time.

Advertisements

Apple’s Fee To Increase In 2019

As mentioned above, the payment of money involved in the deal is directly proportional to the amount of money Google earns through its mobile revenue. As such, the ‘fee’ is reported to be $9 billion this year. Analysts expect the ‘fee’ to go up to $12 billion next year. 

As such, Google accounts for a quite a large contribution in Apple’s total revenue. Apple has been giving hints as to the fact that a large portion of its revenue is going to come from its services. Now, Apple’s services range from a lot of things, with the App Store being the most prominent among them. However, this ‘fee’ payment by Google also comes under this umbrella of service revenue.

However, the same can also be said about Apple’s contribution to Google’s revenue. Back in 2017, Bernstein’s analysts claimed that Apple’s iOS devices account for a whopping 50% of Google’s mobile revenues.

Apple and Google – A Deal to Last?

With the ever-changing scenario of the tech industry these days, it is hard to predict the longevity of anything at all. This deal is lucrative for both parties, at the moment. It could also happen that Google might decide to stop paying Apple the much talked about ‘fee’, should they be confident of their popularity such that Apple would have no other option to replace them with. As it stands, Apple does use other search engines in its smartphones as well. For example, it uses Bing while searching the web through Siri. So, it is really hard to predict how long it will last. But as long as it does, no party is particularly complaining!

LEAVE A REPLY

Please enter your comment!
Please enter your name here
Advertisements

Latest News

India the 3rd Worst Economically Affected Nation by Internet Shutdowns in 2019: Report

2019 saw an increasing awareness about internet shutdowns in the Indian population due to unprecedented first-hand experience...

Amazon and Flipkart Under The Lens Of Indian Authorities For Competition Squashing Activities!

The ongoing tug of war between Offline and Online retailers in India seems to be far from over. On Monday, the Competition...

Constant Internet Suspensions In India Affecting Online Transactions and Economy Adversely

In the wake of the highly controversial and prejudiced Citizenship Amendment Act and other related legal developments such as the NRC, IT...

The Current Generation Require Technology In Class To Make The Most Of Future Opportunities

Technology is the current drive for everything. It has influenced all aspects of life, including cultures. It affects the way we live,...

Reliance Jio Offers Free Calls Over WiFi: Activate It Now

Following Airtel’s launch of VoWiFi calling in December 2019, Jio has now started rolling out VoWiFi calling, as well.

UPI Scam: A Man Loses Rs. 1.01 Lakhs While Using Paytm and Google Pay

Facebook finds it itself in the middle of its first scam of the new decade and the catalyst seems to be its...

In-Depth: Dprime

YouTube Should Have Bid Adieu To Dislike Button Much Earlier?

Online video sharing platform YouTube can be a ruthless place for content creators targeted by 'dislike mobs'. And the site owners totally understand that...

Facebook Has Pulled Off A Masterstroke By Integrating Its ‘Family Of Apps’?

It’s indeed hard to believe that ONE man sitting at Menlo Park, oversees how nearly a third of the world’s population interacts with each...

Facebook’s Crunch Conquest: By Relying Largely On The US Market, Is Facebook Running a Risk?

Two billion! That's Facebook, Inc. (NASDAQ: FB) for you - Right when you thought that this social-media giant has already connected the entire world, it's...

More Articles Like This