Apple and Google compete in many markets and sectors. They also need to be partners in some areas because they are intertwined in the rapidly changing technology ecosystem. A new report from Morgan Stanley highlights this complex relationship when it states that Google will be paying Apple $1 billion in 2014. The massive payment is meant to keep the world largest search engine the default setting for iOS based devices. That is a very large jump from 2009 when Google paid the Cupertino based firm only $82 million to be first in line. According to analyst Scott Devitt, the jump is because the deal struck between the two company’s was based per-device and as the numbers iOS devices has grown rapidly so has the bill to Google. The details of the agreement state that for every one dollar of revenue Google generates from its advertising, Apple will get a 75 cent share. If the number of Apple users keep growing then the amount Google has to pay will also keep growing.
However massive the number seems it is not an Apple advantage as can be seen from Google deal with other firms like the Mozilla Foundation. The maker of the popular Firefox browser will get $400 million from Google in 2014. Google’s partnerships also include Opera.
Apple has successfully used the pressure from Microsoft and Bing to force Google into an agreement that gives Apple added revenue. Apple has gotten a lot more from Google than Microsoft as the maker of Windows has now made Bing the default search of Nokia and BlackBerry.
Apple may be looking into creating a new system where Google is not part of the deal but for corporations, money is a major factor. The $1 billion from Google easy money for Apple because they really do not have to do anything and since Apple does not have a search engine of its own they can go with who ever pays them the most. On the other hand, Google actually ends up paying Apple more to be the default search engine on iOS devices than it actually makes from those users. However, the data generated from users is a big plus point that Google is not willing to ignore.
This dynamic may change soon because Samsung has been rising quickly in the smartphone sector using the Google developed Android mobile operating system. Google is likely watching market share of each company and may push Apple to renegotiate once it sees an opportunity.
Source: TechCrunch
Alicia Keys Tweets From iPhone After BlackBerry Endorsement Deal
During CRTC Hearings Telus Voices Disapproval Of $50 Additional Fee Cap
Lunches So Good Kids Can’t Ignore Them
Invigorating Ginger Smoothie
The U.K.’s Youngest Parents Ever
The new hair Jennifer Lawrence