Everything that Google creates is fundamentally tied to Google Search, nan original Google product, and nan main moneymaker. All of Google’s products are extensions of online search. Google offers plentifulness of useful products, galore of them disposable to nan personification arsenic free software, to steer group to Google Search alternatively than alternatives. Then, Google Search advertisement gross past pays for everything.
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The iPhone should, therefore, beryllium 1 of Google’s biggest worries. Apple’s iPhone personification guidelines is expanding, pinch plentifulness of buyers being loyal to nan ecosystem. But nan iPhone is easy 1 of Google’s biggest wins successful mobile. A high-end beloved merchandise that, strangely enough, makes Google a batch of money.
So overmuch money that Google reportedly paid Apple $18 cardinal successful 2021 for Google Search to nan default hunt motor connected iPhone. So overmuch money that Google wants to support reaping nan rewards while diminishing nan interest it has to salary Apple.
Google Search has ever been nan extremity goal
When Google bought Android, it was acrophobic of Microsoft’s Windows Mobile platform, which would frighten its Google Search business. The world was moving to a smartphone-first computing experience, and Google saw that.
Initially, Google’s Android was expected to powerfulness a BlackBerry-like experience. However, nan iPhone’s presence forced Google to rethink everything and pivot to touch-first experiences.
Again, fundamentally, it’s astir funneling group to Google ads via Google Search. Android was Google’s champion imaginable bet. A measurement to guarantee that Google Search would beryllium nan default hunt motor connected a mobile instrumentality without Google having to interest astir nan platform’s owner.
Consequentially, that’s why Android is free, and anyone tin make an Android telephone without dealing pinch licensing fees. Google wants instrumentality vendors to usage its operating system. And it makes plentifulness of mobile apps that activity good connected Android for users to make nan astir of nan handset. In turn, those apps, make gross via ads.
The iPhone woody is worthy billions to Google
But pinch each that successful mind, I’d situation opportunity nan iPhone is moreover much important to Google’s success. Even though Google developed its ain mobile operating system. And moreover though Android is nan ascendant level successful nan mobile business.
Think astir it; if Google paid Apple $18 cardinal successful 2021, it must person generated a large chunk of rate from Google Search connected iPhone.
The interest item comes from a The New York Times communicative looking astatine Google’s Search-related plans connected iPhone. Two group acquainted pinch nan woody revealed nan fig to nan insubstantial astatine a clip erstwhile nan US is fighting Google successful courts successful what mightiness move retired to beryllium 1 of nan DOJ’s astir important antitrust lawsuits ever.
To put things successful perspective, Google made astir $257 billion successful 2021. Revenue roseate to almost $280 cardinal past year. It’s nary wonderment that Google would salary unthinkable fees to Apple to stay nan default hunt motor connected iPhone. The woody would widen to iPad and Mac arsenic well.
The online hunt activity connected iPhone is conscionable excessively valuable to walk up. Even if immoderate consumers move distant from nan default, galore don’t. And Google cashes successful connected nan ensuing action.
Why iPhone owners are truthful important
Without a woody to person Google Search nan default connected iPhone, Google would apt suffer money from a peculiar type of mobile user. iPhone buyers already walk much money than Android users arsenic nan iPhone is mostly much expensive.
They past acquisition integer contented from Apple’s stores. A caller study showed iPhone users walk 7.4 times much money connected apps than Android users. iPhone users person ever outspent Android users erstwhile it comes to apps, and that’s why nan iPhone remains nan preferred mobile level for creating apps.
This is simply a cardinal item because it implies iPhone users mightiness walk much money than Android users successful general. And online hunt is really mobile users find products to buy. They shop online utilizing nan iPhone because they already browse and hunt nan web connected nan handset. That’s why Google Search connected iPhone is specified a lucrative woody for Google.
Also, galore iPhone owners are loyal to nan platform. They’ll upgrade to different costly iPhone successful a fewer years alternatively than buying Android.
That intends Google wouldn’t get entree to a information of their money without Google Search being nan default hunt motor successful Safari.
Also, caller surveys show that teens for illustration nan iPhone complete Android. That’s a large problem for Google, but not truthful large if these users extremity up connected Google Search while utilizing nan web.
How overmuch money does Google make from iPhone?
We don’t person a gross fig for Google Search connected iPhone. But if Google spent 7% of gross successful 2021 to beryllium nan default online hunt action connected iPhone, nan iPhone-generated gross must beryllium important to its bottommost line.
That’s why it’s unsurprising to perceive that Google is besides looking to clasp nan default position while perchance reducing its interest to Apple. The Times points retired that Google is looking astatine the EU Digital Markets Act (DMA) rule arsenic a measurement to unit Apple to unfastened up various aspects of nan iPhone to 3rd parties.
Google wants to return advantage of that by perchance steering consumers to Chrome alternatively of Apple’s Safari and Spotlight successful nan future. That’s assuming nan EU would unit Apple to connection a browser prime successful nan region:
Google executives figured that if users had to make a choice, nan number of European iPhone users who selected Chrome could triple, according to documents reviewed by The Times. That would mean nan institution could support much hunt advertisement gross and salary little of it to Apple.
Interestingly, the EU forced Google to connection Android buyers successful Europe a prime of browsers respective years ago. So Google surely knows really important being nan default hunt action connected a smartphone is.
Google Search connected iPhone is much important than Pixel hardware
I’ll besides constituent retired that nan iPhone is much important for Google than nan Pixel phones it makes. Apple sells complete 200 cardinal iPhones a year. That’s nan accustomed estimate, arsenic Apple stopped reporting figures successful 2018. It sold astir 218 million iPhones successful 2018.
iPhone gross is estimated astatine astir $192 billion for 2021. Apple’s yearly nett income roseate to almost $366 billion successful 2021. The $18 cardinal Google woody represents 9.38% of those iPhone sales. Or astir 5% of that $366 cardinal total.
Google is obscurity adjacent to akin figures for nan Pixel series, contempt making its ain hardware for astir arsenic agelong arsenic Apple. A report successful early October 2022 said Google had sold 27.6 cardinal Pixel units since 2016. Separately, projections successful 2018 said Google Pixel gross would double to $6.92 billion successful 2021.
That’s different large logic why nan iPhone is specified a cardinal triumph for Google. Rather than worrying astir manufacturing, marketing, and trading a high-end merchandise that would thrust up Google Search earnings, Google tin conscionable salary for that default position connected iPhone.