Google to Pay Apple $1 Billion to be Default iOS Search Engine in 2014

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Google and Apple may be at each other’s throats most of the time as they compete in so many different technology markets but this doesn’t stop them playing nice and cooperating when there’s $1 billion on the table!

The iPhone versus Android smartphone battle for dominance continues to rage – both in the markets and in online forums – but the opportunity for Google to reach iPhone users is just too tempting to pass up. According to a report from Morgan Stanley market analysts, Google could have to cough up over $1 billion for the privilege of being the default search engine pre-loaded into iOS devices.

The cost of keeping the search business of Apple’s mobile device users is steadily increasing, it seems. In 2009, Google paid $82 million to be the default iOS search engine, according to Morgan Stanley’s analyst Scott Devitt, the cost is likely to keep edging up as iOS sales improve and mobile search becomes an ever more important market to capture.

In this context, it’s easy to see why Google are pushing so hard to improve the market share of Android. Apple keeps a whopping 75 cents on each and every dollar that Google makes through data collection and advertising on iOS devices. To hand its chief rival such a huge percentage must be galling for Google, hence the desire to increase the spread of Android.

The smartphone market evolves extremely rapidly, meaning that this kind of deal is unlikely to remain on the table indefinitely. Samsung has become the dominant smartphone manufacturer, helping Google push Android devices on a truly impressive scale. Similarly, Apple has been edging towards the possibility of a Google-free iPhone for some time, developing their own maps and removing the YouTube app as a standard part of iOS. Could we be witnessing the last few years of Google remaining the default search engine for Apple’s mobile devices?

Should either party decide to end the agreement sooner rather than later, it’s curious to consider who Apple would pick as the new standard search engine for iOS. An even more pressing question is whether iOS users would stick with the new default – be it Bing, Yahoo! or whoever – or install Google instead.

While iPhone and iPad users of today is a lot more technologically savvy than internet users of previous generations, a sizeable proportion of them will stick with the default settings simply out of laziness or unwillingness to install another. Even so, changing browsers remains one of the most regular questions asked by iOS users of those performing IT support desk jobs for Apple. Therefore it stands to reason that since Google has such a huge market share of search, most iPhone/iPad users will make the switch if they genuinely prefer Google over other search engines.

Until either side is confident enough to break off from the mutually beneficial arrangement, Google will continue to grace the search screens of iOS users for some time yet!