Google pays Apple between US$18 billion to $20 billion a year to remain the dominant search engine in the iPhone, according to a financial analyst who thinks this deal, and others like it, are now at risk, reports The Register.
Bernstein has published a report looking into the potential implications for Apple of the civil antitrust legal battle between the Department of Justice (DoJ) and Google. The DoJ argues that Google monopolizes search and search advertising.
One of the major interest areas in the case, which started last month, is the Information Services Agreement (ISA) between Apple and Google. In the trial it is being highlighted as one of the primary examples of anticompetitive behavior.
“We believe there is a possibility that federal courts rule against Google and force it to terminate its search deal with Apple,” said Bernstein in the report sent to The Register. “We estimate that the ISA is worth $18B-20B in annual payments from Google to Apple, accounting for 14-16 percent of Apple’s annual operating profits.”
The Sellers Research Group (that’s me) thinks the DoJ/Google battle could push Apple to make its own search engine, though the company has denied such plans. However, for years, Apple pondered building a search engine that could replace Google as the preferred option on its devices.
A few years ago, Apple introduced a web crawler called Applebot. Like crawlers from Google and Microsoft, this system scours the internet to index websites for future search results. It essentially exists to find sites that it can provide to users in Siri and Spotlight.
In a 2018 Macworld article, Jason Cross said Apple should develop its own search engine. “The company’s stance on privacy is at odds with the way the biggest search engines operate,” Cross wrote. “Maybe there’s a better way.”
I’m not totally convinced that we’ll see Apple Search — or perhaps it will be called “ViewPoint” as shown in the accompanying image by Tom Hyoos. However, I’m not as sure as I once was that we won’t.
Article provided with permission from AppleWorld.Today