Steve Wozniak, co-founder of Apple, was never a big fan of search engines and ecommerce. If he had been, Apple engineers would have built a search engine in its early days for its computers, and much later, for its mobile phones.
Wozniak, who is credited with creating the first personal computer, barely mentioned the topic of search engines and ecommerce back in 2015 during at National Association of Music Merchants (NAMM) keynote in Anaheim, California.
At the time, Wozniak told attendees he would rather go into a store to touch and feel the merchandise than search and buy the product online, and gave an example of going into a physical music store to play an instrument.
Eddy Cue, Apple's senior vice president of services, in his testimony in federal court Tuesday shed light on the contract the company has with Google, and said there are no plans to create its own search engine to rival Google.
He said that there wasn’t “anybody as good’’ as Google at helping phone and computer users search the internet.
The landmark court cases could bring major changes for search advertising and ecommerce. But while the Department of Justice argues that the deal was illegal, Apple said it was just giving consumers the best product.
When Cue renegotiated the service agreement with Google CEO Sundar Pichai in 2016, one goal was to get Google to increase the revenue-share percentage it pays to Apple, Cue said in his testimony. And under these terms, Google pays an undisclosed cut of the net revenue it makes from advertising on searches run on Apple devices.
The U.S. Justice Department is trying to prove that Google has overstepped its authority by taking advantage of its dominance, in which it facilitates about 90% of online searches.
Google’s conversation with companies like Apple was used to maintain market share. The company’s executives have defended its position by saying its product is superior. Others apparently feel the same.
Google has a financial agreement in place with Apple to become the default search engine on its products at a cost of more than $9 billion annually.
Google also pays Apple advertising revenue. This fiscal year, Google could pay Apple as much as $19 billion, according to an estimate from Bernstein analyst Toni Sacconaghi.
Cue in court defended Apple’s decision to make Google the default search engine, saying there was no “valid alternative.’’ And in fact, Apple executives have been saying that for years.
Speaking at the D8 conference in 2018, Jobs pushed back when someone tried to call Siri a search company.
“They're not a search company,” he said. “They're an AI company. We have no plans to go into the search business. We don't care about it -- other people do it well.”
Jobs was both accurate and inaccurate. Siri, in a sense, is a search engine in that it has the ability to find information, but in the technical sense it does not support an index of information.
When asked whether he viewed Google as a competitor, Jobs said: “They decided to compete with us. We didn't go into the search business.”
Five years later, details of Google’s strategies with Apple are spilling into the public domain.
Testimony has provided a rare look into how Google cements deals, as The Wall Street Journal points out. Apple is not the only company to come into focus in Google’s trial.
Samsung Electronics also has been in the spotlight as a partner that has been key to making its search engine the default choice on many smartphones worldwide.
Google clashed with Samsung about changes it made to its mobile web browser that made it easier for users to switch default search engines, according to the WSJ, citing testimony from Antonio Rangel, a behavioral economics professor called by the DOJ.
Google protested, telling Samsung it had violated their agreement, and the phone maker rolled back the change, Rangel said.
Reportedly, there also were missed opportunities. Smartphone carriers AT&T and Verizon made Yahoo and Microsoft’s Bing, respectively, default choices on Android phones, and Google lost deals to Yahoo because it wouldn’t match the rival’s greater revenue split. Instead, he tried to convince potential partners they could make more money with Google because it had the superior product, Rangel said.