Philip Elmer-DeWitt, quoting an analyst note:
We now estimate that Google’s payments to AAPL to be the default search engine on iOS were ~$10B in FY 20.
We now forecast that Google’s payments to Apple might be nearly $15B in FY 21.
And this, full of juicy tidbits:
We see two potential risks to GOOG’s payments to AAPL: (1) regulatory risk, which we believe is real, but likely years away; we see a potential 4-5% impact to Apple’s gross profits from an adverse ruling; & (2) that Google chooses to stop paying Apple to be the default search engine altogether, or looks to renegotiate terms and pay less. We have noted in prior research that GOOG is likely paying to ensure Microsoft doesn’t outbid it. That said, with payments likely to approach $18 – $20B in FY 22, it not implausible that Google could revisit its strategy.
Imagine Microsoft becoming the default Apple search engine. That would be an odd experience. And might antitrust regulators have some say in this? I’d imagine there’d be a lot of lobbying on all sides if that issue heated up.