Google is reportedly paying out a considerable fee to be the default search engine on Apple devices with a claimed $1 billion being paid out
Despite their continuing legal battles, new reports have suggested search giant Google is paying bitter rival Apple as much as $1 billion (£638.24 million) to be the default search browser on the company’s market dominating hardware ranges.
Covering off the likes of the Mac as well as the smartphone scene leading Apple iPhone and tablet market dominating Apple iPad, industry analysts have suggested Apple’s choice of default search option comes with a hefty price tag for Google.
Following on from reports that Apple is to move away from Google Maps in order to introduce its own propriety mapping software, Macquarie analyst Ben Schachter suggested that Apple’s current search deal with Google could equate to the un-paralleled fee.
Despite the hefty fee Schachter has suggested Google continues to make a considerable profit from its placement on Apple devices with an annual $1.3 billion gross revenue generated from the deal.
“Google generated $1.3bn in gross search revenue through default search placement on Apple devices,” Schachter said. “In other words, this $1.3bn of search revenue ($335m net search revenue) in 2011 is at risk if Apple moves away from Google. $335m represented 1% of net Google.com search revenue. Notably, mobile/Apple revenue is among its fastest growing revenue drivers.”