By Bernstein’s analyst, Toni Sacconaghi calls that Apple receives about USD8 billion annually so Google can become the default search engine on iOS devices such as Iphones. This generates a large amount of ad revenue for Google.
Phone Arena reported that Google received a USD25 billion per year from iOS, and the revenue Apple acquired from this search engine company was only a boon to the American technology giant.
Sacconaghi mentions that the reason Google paid for such a large amount of the charge to Apple was based on the fear that Google would be defeated by Microsoft if it did not provide such funds.
This will make Bing the new default search engine for Apple’s smartphone, iPhone. However, Sacconaghi also mentions that it does not mean that Apple is free from risk, because if Apple replaces Google with Bing, Microsoft may lose interest in making Bing their company’s priority.
As such, Microsoft may stop the development of its search engine as the default search option on the iPhone. This has the potential to cause Google to lose interest in making Google the default search engine for iOS, albeit at a more affordable cost.
In addition, Sacconaghi also mentions that Apple can buy affordable insurance policies to confront the scenario by purchasing its own search engine. Sacconaghi appropriately emphasized that Apple is unable to monetize searches without third-party help and should buy DuckDuckGo.
With a market share of 1.35 percent of the U.S. market per month last May, DuckDuckGo has rated the potential to raise concerns for Google in relation to the loss of revenue worth USD25 billion (Rp351,7 trillion) from the iOS search.
As information on the United States market, Google’s search engine includes a market share of 88.16 percent, while Bing amounted to 6.51 percent. In addition, Sacconaghi mentions that this purchase can be done by Apple at a price of less than USD1 billion (Rp14,07 trillion).
The amount is less compared to Apple’s overall revenue. With 93 employees in last May, DuckDuckGo was slightly larger compared to the general Apple acquisition, and handled as much as 61.75 searches per day in May 2020, and the search store could not be associated with individual users.