
Apple search for onsite and in apps has become an
important feature for the company.
Google could pay more than $15 billion to Apple this year to keep its search engine the default on Safari -- up from $10 billion in fiscal-year 2020.
A Bernstein analyst estimated the latest deal with Google could contribute
to the growth of Apple’s services about 850 basis points (BPS) -- a common unit of measurement for interest rates and other percentages in finance -- and amount to about 9% of the
company’s gross profits.
In 2017, it’s estimated that Google paid Apple about $3 billion to remain the default search engine on iOS devices, but search for Apple has become so much
more.
There are two potential risks to Google’s payments to Apple. The first points to regulatory risk. This is real, but likely years away. There’s also a potential impact of
between 4% and 5% to Apple’s gross profits from an adverse ruling.
advertisement
advertisement
The other challenge is that Google decided to stop paying Apple to be the default search engine, or is looking to
renegotiate terms and pay less. In prior research, the analyst notes that Google has likely been doing this so Microsoft does
not outbid it.
Safari holds 53% of mobile browser market share
and 18% of desktop browser market share in the U.S.
In 2020, the companies reported that Apple began stepping up efforts to increase the development of its own search technology.
Apple recruited several search experts in recent years. It hired Google’s head of search, John Giannandrea, in April 2018, and now has several job openings related to search -- from software
engineer and senior machine learning engineer in search science to senior machine-learning engineer.
Those efforts could point to other search capabilities.
On Monday the company
announced the acquisition of Primephonic, a classical music-streaming service that offers a listening experience with search and browse functions optimized for classical, premium-quality audio,
handpicked expert recommendations, and extensive contextual details on repertoire and recordings.
Apple Music subscribers, with the addition of Primephonic, gain an improved classical music
experience, beginning with Primephonic playlists and exclusive audio content.
In the coming months, Apple Music Classical fans will get a dedicated experience with the best features of
Primephonic, including better browsing and search capabilities by composer and by repertoire, detailed displays of classical music metadata, plus new features and benefits.
Primephonic is no
longer available for new subscribers.
Apple will take the company offline beginning September 7, and then plans to launch a dedicated classical music app next year that combines
Primephonic’s classical user interface with added features.