“Google Inc. is paying Apple Inc. a hefty fee to keep its search bar on the iPhone,” Joel Rosenblatt and Adam Satariano report for Bloomberg.
“Apple received $1 billion from its rival in 2014 [a negligible pittance for Apple – MDN Ed.], according to a transcript of court proceedings from Oracle Corp.’s copyright lawsuit against Google,” Rosenblatt and Satariano report. “The revenue-sharing agreement reveals the lengths Google must go to keep people using its search tool on mobile devices. It also shows how Apple benefits financially from Google’s advertising-based business model that Chief Executive Officer Tim Cook has criticized as an intrusion of privacy.”
“Annette Hurst, the Oracle attorney who disclosed details of the Google-Apple agreement at last week’s court hearing, said a Google witness questioned during pretrial information said that ‘at one point in time the revenue share was 34 percent,” Rosenblatt and Satariano report. “It wasn’t clear from the transcript whether that percentage is the amount of revenue kept by Google or paid to Apple.”
Read more in the full article here.
MacDailyNews Take: Bu, bu, but market share!
Google made a crucial mistake: They gave away Android to “partners” who pushed and continue to push the product into the hands of the exact opposite type of user that Google needs for Android to truly thrive. Hence, Android is a backwater of second-rate, or worse, app versions that are only downloaded when free or ad-supported – but the Android user is notoriously cheap, so the ads don’t sell for much because they don’t work very well. You’d have guessed that Google would have understood this, but you’d have guessed wrong.
Google built a platform that depends heavily on advertising support, but sold it to the very type of customer who’s the least likely to patronize ads.
iOS users are the ones who buy apps, so developers focus on iOS users. iOS users buy products, so accessory makers focus on iOS users. iOS users have money and the proven will to spend it, so vehicle makers focus on iOS users. Etcetera. Android can have the “Hee Haw” demographic. Apple doesn’t want it or need it; it’s far more trouble than it’s worth. – MacDailyNews, November 26, 2012
—
“All men are created equal.”
Well, not when it comes to users of smartphones and tablets…
The bottom line: Those who settle for Android devices are not equal to iOS users. The fact is that iOS users are worth significantly more than Android settlers to developers, advertisers, third-party accessory makers (speakers, cases, chargers, cables, etc.), vehicle makers, musicians, TV show producers, movie producers, book authors, carriers, retailers, podcasters… The list goes on and on.
The quality of the customer matters. A lot.
Facile “analyses” that look only at market (unit) share, equating one Android settler to one iOS user, make a fatal error by incorrectly equating users of each platform one-to-one.
When it comes to mobile operating systems, all users are simply not equal. – SteveJack, MacDailyNews, November 15, 2014
SEE ALSO:
Google Play saw double the downloads, but Apple’s App Store generated 75% more revenue – January 20, 2016
Apple’s iOS again leads in mobile advertising revenue – November 3, 2015
Two big reasons why Google (Alphabet Inc.) might not survive the decade – November 3, 2015
Apple iPhone owns over 90% of smartphone profits, so why do others even bother fighting over Apple’s scraps? – October 8, 2015
Apple’s iPhone owns 92% of smartphone industry’s profits – July 13, 2015
Study: iPhone users are smarter and richer than those who settle for Android phones – January 22, 2015
Why Android users can’t have the nicest things – January 5, 2015
iPhone users earn significantly more than those who settle for Android phones – October 8, 2014
Yet more proof that Android is for poor people – June 27, 2014
More proof that Android is for poor people – May 13, 2014
Android users poorer, shorter, unhealthier, less educated, far less charitable than Apple iPhone users – November 13, 2013
IDC data shows two thirds of Android’s 81% smartphone share are cheap junk phones – November 13, 2013
CIRP: Apple iPhone users are younger, richer, and better educated than those who settle for Samsung knockoff phones – August 19, 2013
[Thanks to MacDailyNews Readers “Fred Mertz” and “Matt R.” for the heads up.]
Should read the negative slant AI put on this… Was written to sound as if Google paid Apple $1 billion to hand over iOS user data. It’s a ridiculous write up.
“shows how Apple benefits financially from Google’s advertising-based business model that Chief Executive Officer Tim Cook has criticized as an intrusion of privacy ”
Apple made 186 billion in 2014… I don’t think they needed that 1 billion from Google’s ad revenue.
For all we know Steve Jobs could of made a deal for Google to maintain its role as default Safari search engine indefinitely.
“Could have,” not “could of.”
And, don’t even try blaming autocorrect. American public “education,” I presume?
Now publicly shamed, hopefully you’ll remember this one this time.
I used to buy into the MDN quote “Google made a crucial mistake: They gave away Android to “partners” who pushed and continue to push the product into the hands of the exact opposite type of user that Google needs for Android to truly thrive.”
But, their strategy is very different. They are knowingly going after those very customers. They are using partners who make no money and go after the Hee Haw group with reckless abandon. Google makes money on the advertising, and doesn’t have to share it except through continued support for Android. I’m guessing they spend much less on supporting Android than they make on the advertising. Not a bad strategy, all the while keeping Apple from getting more powerful than they already are.
Only problem is that Android is bastardized by their “Partners” in an effort to eek out some profit for all their work. This keeps Google from developing the sticky ecosphere that Apple users have.
And I mean “using partners” in the most sexual ways possible.
Double the fee every year until this stop paying it. Then introduce your own search engine. A billion dollars a year, you should be able to create something better than google behind the scenes and release it when paying $2, $4 billion a year becomes too much for them.
If anyone is fool enough to want to use Google, that is their business. Apple should simply take the money and run.
But as Apple increases its quantity of iOS and OS X devices in the field, the fee should increase proportionally. And that is in addition to other normal fee increases for other fundamental business an economic reasons.
Personally, I avoid Google whenever possible (I use Duck Duck Go). Have been Microsoft-free for over 10 years, too. Consumer choice rules!
Apple is foolish to use Google search as the default search engine. It’s merely helping Google to surpass them in value because Wall Street investors believe Google’s search revenue stream is guaranteed for life. They’re too stupid to realize that the iOS platform provides a very large part of Google’s search revenue stream. If it gets cut off, Google will surely notice the loss in revenue. $1 billion is cheap insurance IMHO. I’m not sure why Apple continues to let Google feed off them when Google is always being given the higher value by Wall Street. Apple is always seen as the most vulnerable company while Google gets a free pass of being teflon-coated against revenue losses.
I’m not anti-Google. I merely resent the value Wall Street places on Google being far higher than what is placed on Apple. Let’s be fair about value or at least give both companies equal value. Google’s P/E of 30 against Apple’s P/E of 10 is far too lopsided. I’m sure Google needs iOS’s platform revenue more than Apple needs Google’s default search support on the iOS platform.
This is a case of one company riding on another company’s coattails and somehow ending up the winner in terms of value and respect. However, that does happen in NASCAR when it comes to a second place car drafting the lead car to pull a victory. That’s what Google is doing to Apple. Drafting Apple for a win. Maybe that’s the easiest way to do it.
Google files briefs to the Supreme Court on behalf of Samsung, Apple needs to cut Google off.