Highlights

• Google dispensed an eye-popping $18 billion to Apple in 2021 to remain the iPhone’s default search engine.
• The deal makes up a substantial 14-16% of Apple’s yearly operating profits.
• Google’s 2021 total spending on default search-engine deals across all devices was a staggering $26.3 billion.

In a momentous transaction that has recently come to light, Google forked over an astounding $18 billion to Apple in 2021 to ensure its search engine stays as the go-to option on iPhones.

Unveiled amid a current legal battle between Google and the U.S.

Justice Department, the details of the deal underscore the colossal financial implications of keeping this tech partnership intact.

Supported by an article from The New York Times, the whopping price tag closely matches earlier assessments by analysts at Bernstein, who estimated the cost to be in the range of $18 billion to $20 billion annually.

What’s even more remarkable is that this hefty sum comprises a significant 14-16% of Apple’s yearly operating income.

But Apple isn’t the sole recipient of Google’s financial largesse.

A report from Bloomberg indicated that Google spent a jaw-dropping $26.3 billion on securing default search engine placements across a variety of device manufacturers in 2021.

The bulk of that investment went to Apple, emphasizing Google’s steadfast commitment to keeping its search services at the pinnacle of the user experience.

Although Apple has had its native search functionality, known as Spotlight, integrated into its iPhones, iPads, and Macs since 2005, the company has not yet fully stepped into the search engine arena.

Spotlight lets users perform queries for news, weather, and even word definitions, presenting results that are comparable to those on alternative search platforms.

This positions Spotlight as a potential, if still limited, rival to Google’s search capabilities.

The revelation of this staggering financial arrangement raises several compelling questions.

How tenable is this alliance in the long term? Does Google’s commanding presence confer an unjust benefit, potentially sparking antitrust scrutiny?

And could Spotlight, with advancements in its functionalities, ever become a formidable challenger to Google’s stronghold on search?

FAQs

How much did Google pay Apple to remain the default search engine on iPhones?

Google paid Apple a staggering $18 billion in 2021 to maintain its position as the default search engine on iPhones.

What percentage of Apple’s operating profits comes from Google’s payment?

The sum paid by Google accounts for a substantial 14-16% of Apple’s annual operating profits.

Did Google make similar deals with other device-makers?

Yes, Google spent a total of $26.3 billion in 2021 on default search-engine arrangements across various device manufacturers, with the lion’s share going to Apple.

Could Apple’s Spotlight feature become a competitor to Google’s search engine?

Spotlight, Apple’s own search functionality, allows for news, weather, and word lookup and could be viewed as a nascent yet currently restrained competitor to Google’s search engine.