Google to Pay Apple $15 Billion to dominate as Default Search Engine on Safari in 2021

According to analysts, Google is all set to pay $15 billion to Apple to dominate as the default search engine on iPhone, iPad, and Mac in 2021.

 

The price to keep Google as the default search engine on the Safari browser has escalated once again & is expected to increase even more in 2022. It is a known fact that Google pays Apple a huge amount every year to retain the dominance of its search engine, which involves outbidding Microsoft.

According to an investor note spotted by Ped30, Bernstein analysts reported that in 2020, Google’s payment to Apple to dominate Safari’s default search engine was around $10 billion, being higher than the previous estimate of $8 billion. As per the analysts “Apple’s public filings as well as a bottom-up analysis of Google’s TAC (traffic acquisition costs) payments” show that for fiscal year (FY) 2021, Google may pay Apple nearly $15 billion, which would contribute 9 percent to the company’s gross profit.

The analysts reported that Google may have to pay Apple $18 billion and $20 billion for FY22, the company may amend its strategy for the same. Two potential risks have been stated by them in this kind of arrangement, a regulatory risk which is some years away but can impact Apple’s gross profit by 4 to 5 percent if there is a ruling against it. Next, Google may renegotiate its terms for a lesser fee or stop paying anything. Though it is likely that Google will continue to pay Apple to outbid Microsoft as its Bing search engine is the competent runner-up to be Safari’s default search engine.

Several criticisms have been faced by Apple and Google’s deal regarding the search engine on iOS devices in the past. As per UK Competition and Markets Authority, this deal creates “a significant barrier to entry and expansion” for Google’s rivals in the search engine market. Also, Apple has been seen scaling up its efforts to develop its own search engine to overtake Google. Doing so may lead Apple to miss out on the payment it gets from Google every year.

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