Bernstein: Google to pay Apple $3 billion this year to remain the default search engine on iPhones and iPads

“Google is paying Apple billions of dollars to remain the default search engine on iPhones and iPads, Bernstein said in a note to investors on Monday,” Todd Haselton reports for CNBC.

“The firm believes Google will pay Apple about $3 billion this year, up from $1 billion just three years ago,” Haselton reports. “‘Court documents indicate that Google paid Apple $1B in 2014, and we estimate that total Google payments to Apple in FY 17 may approach $3B,’ Bernstein analyst A.M. Sacconaghi Jr. said. ‘Given that Google payments are nearly all profit for Apple, Google alone may account for 5% of Apple’s total operating profits this year, and may account for 25% of total company OP growth over the last two years.'”

Haselton reports, “Sacconaghi said that Apple’s iOS devices contribute about 50 percent to Google’s mobile search revenues.”

Read more in the full article here.

MacDailyNews Take: Because iOS users are worth far more than Android settlers.

“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

Android is pushed to users who are, in general:

a) confused about why they should be choosing an iPhone over an inferior knockoff and therefore might be less prone to understand/explore their devices’ capabilities or trust their devices with credit card info for shopping; and/or
b) enticed with “Buy One Get One Free,” “Buy One, Get Two or More Free,” or similar ($100 Gift Cards with Purchase) offers.

Neither type of customer is the cream of the crop when it comes to successful engagement or coveted demographics; closer to the bottom of the barrel than the top, in fact. Android can be widespread and still demographically inferior precisely because of the way in which and to whom Android devices are marketed. Unending BOGO promos attract a seemingly unending stream of cheapskate freetards just as inane, pointless TV commercials about robots or blasting holes in concrete walls attract meatheads and dullards, not exactly the best demographics unless you’re peddling muscle building powders or grease monkey overalls.

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

SEE ALSO:
Higher income U.S. states use Apple iPhones; lower income states use Samsung Galaxy phones – September 27, 2016
iOS users are worth 10X more than those who settle for Android – July 27, 2016
Apple’s App Store revenue nearly double that of Google’s Android – April 20, 2016
Poor man’s iPhone: Android on the decline – February 26, 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
iPhone users smarter, richer than Android phone users – August 16, 2011
Study: Apple iPhone users richer, younger, more productive than other so-called ‘smartphone’ users – June 12, 2009

20 Comments

  1. un-default it.

    Fascist Cook’s own words:

    Mr Cook, boss of the world’s largest company, says that the epidemic of false reports ‘is a big problem in a lot of the world’ and necessitates a crackdown by the authorities and technology firms.”

    “‘It has to be ingrained in the schools, it has to be ingrained in the public,’ said Mr Cook.

    Tim Cook: Treasonous enemy of the First Amendment.

    1. WTF are you talking about?

      Google searches are a commercial directory that have been manipulated by both Google and others to push certain results over others. If you do not want Google as your default you can easily change it. iOS offers Google, Yahoo, Bing and DuckDuckGo in Settings/Safari/Search Engine. Alternately you can bookmark any search engine you choose and make it your home screen.

      Now, go take your meds.

      1. Botty is a twit who bought himself a labelmaker and now spends all his time sticking labels on everything he sees. That’s not the funniest part though. He is too lazy to eve attempt reasonably sophisticated analysis to complicated real world issues. It looks like he was kicked off his high school debate team and decided to deploy his abysmal skills on what was once a Mac forum to expose his narrow mindedness and Breibart-fueled biases.

        To wit: Botty and his crew disparage the majority of the society they claim they want to make great. Never have they even attempted to define how we should measure the collective greatness of the UNITED States, and instead they demonstrate divisionism and incivility at every opportunity.

        Thus as a tech forum, MDN is gone. The moderators missed their calling as political operatives.

  2. Apple really should have developed their own search engine by now. I avoid Google products as much as I can but stick with Google for search since it’s the best in my experience. Though I’d never trust Google with my email.

    1. True – they should have – but $3 billion dollars says they won’t…

      I also avoid Google-everything like the plague, ex-search. Hopefully someday we’ll see a truly great non-profit search that can replace big brother..

      1. Apple doesn’t need the money. It is stupid Apple leadership that continues to pretend that Google could ever be a trusted partner.

        No amount of ¥ will ever change that.

    2. Why? The business model around building a search engine isn’t there. Search engines depend on advertising revenue and internet advertising is a sleazy business that involves tracking users and monetizing their data. It also costs a ton of money to create and maintain a search engine. In this case, Apple is receiving billions of dollars rather than spending billions of dollars for this feature. They’re also not passing on your personal information as you don’t have to log in to Google in order to get their search results.

  3. Is this true?

    They’re also not passing on your personal information as you don’t have to log in to Google in order to get their search results.

    Then there is no reason to use the Google Search app and just use the Safari browser and search from there. Is that correct?

  4. There is one big, unfortunate reality out there. With all the evil that Google now represents, there is, objectively, no other better (or even as good) search engine. Everyone I know who became disgusted by Google and its practices at some point switched to Bing, Duck-duck-go, Yahoo, or similar. And eventually, they all had to come back for meaningful results. Especially if you are searching more obscure subject matter, there is, alas, simply no usable alternative.

    I am sure Google knows this quite well. Apple doesn’t really have much of a choice (Google vs. anyone else). And yet, they are still compelled to shell out $3B (billion) every year, just so that Apple doesn’t get any new ideas. This tells us how massively important Apple is to Google.

      1. Other than you, I don’t know anyone who went to any other search engine and kept using it. The longest away that I know was about two months. Literally everyone (dozens of people) who were truly disgusted with Google and made a very concerted effort to avoid it like the plague (closing g-mail — no small feat, re-configuring browsers on ALL devices, etc), and were determined to keep away. Eventually, it became rather frustrating to constantly have to go back to google.com in order to find some obscure bit of info. Eventually, they all gave up.

        Most of them use startpage.com, to shield themselves from google’s grubby hands / prying eyes.

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