Google is expected to pay Apple more than previous years to remain the default Safari search engine.
Based on 'disclosures' in Apple's public filings and a bottom-up analysis of Google's traffic acquisition costs payments, Bernstein analysts predict that Google will be paying Apple nearly USD$15 billion (S$20.3 billion) this year which is a sharp increase from USD$10 billion in 2020.
The amount is forecasted to hit between USD$18 billion and USD$20 billion in 2022. The analysts believe Google is paying higher amounts to keep Microsoft at bay.
However, Google's deal with Apple may come under regulatory scrutiny in the next few years and an adverse ruling could result in four to five per cent impact on Apple's gross profits. In addition, Google may renegotiate terms with Apple and pay less.
Google reportedly paid Apple USD$9 billion in 2018 and $12 billion in 2019. Analyst Rod Hall claimed that "Apple is one of the biggest channels of traffic acquisition for Google."
Nonetheless, Apple is rumoured to be developing an alternative to Google Search as there are 'frequent' job ads for search engineers and increased activities from Apple's web crawler.
This article was first published in Hardware Zone.