Apple’s lucrative deal with Alphabet subsidiary Google, making Google Search the default on Safari, faces an uncertain future due to the looming U.S. Department of Justice’s antitrust lawsuit, The Information reports.
This partnership is a financial powerhouse for both companies. Apple reportedly earned over $20 billion in 2022, representing 36% of ad revenue from Safari searches. Google, on the other hand, risks losing access to 70% of iPhone searches if the lawsuit goes south. This would significantly impact its $207 billion mobile search ad revenue in 2023.
Sensing the potential danger, Google has been actively pushing iPhone users towards their own apps, Google and Chrome. They’ve invested in features like Lens image search and personalized content feeds, along with extensive advertising campaigns highlighting exclusive app features. However, the results haven’t been stellar – iPhone searches conducted through Google apps have only increased from 25% to a low 30% range over the past five years, The Information reports.
Recently, Google hired Robby Stein, an industry veteran, to spearhead user acquisition for their iPhone apps. He’s exploring ways to leverage generative AI to make Google apps more attractive. Their goal is to double the number of Google searches outside Safari, despite stalling user growth in the Google and Chrome apps.
This shift is critical for Google to lessen the potential blow from the lawsuit. A negative ruling wouldn’t just impact their revenue, but also set a precedent for how regulators view Apple’s default settings and competition practices.
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MacDailyNews Take: oogle pays Apple tens of billions of dollars annually to be Safari’s default search engine because Mac, iPhone, and iPad users are extremely demographically desirable (to any company that like to make profits) versus those who settle for iPhone knockoffs.
In September 2023, Asymco‘s Horace Dediu did the math and arrived at the conclusion that Apple iPhone owners are 7.4 times more valuable than those who settle for Android phones.
Real iPhones vs. Poor Man’s iPhones. Same as it ever was. — MacDailyNews, April 22, 2022
The bottom line: Those who settle for Android devices are not equal to iOS users. The fact is that iOS users are worth significantly more than Android settlers to developers, advertisers, third-party accessory makers (speakers, cases, chargers, cables, etc.), vehicle makers, musicians, TV show producers, movie producers, book authors, carriers, retailers, podcasters… The list goes on and on.
The quality of the customer matters. A lot.
Facile “analyses” that look only at market (unit) share, equating one Android settler to one iOS user, make a fatal error by incorrectly equating users of each platform one-to-one.
When it comes to mobile operating systems, all users are simply not equal. – SteveJack, MacDailyNews, November 15, 2014
Android is pushed to users who are, in general:
a) confused about why they should be choosing an iPhone over an inferior knockoff and therefore might be less prone to understand/explore their devices’ capabilities or trust their devices with credit card info for shopping; and/or
b) enticed with “Buy One Get One Free,” “Buy One, Get Two or More Free,” or similar ($100 Gift Cards with Purchase) offers.
Neither type of customer is the cream of the crop when it comes to successful engagement or coveted demographics; closer to the bottom of the barrel than the top, in fact. Android can be widespread and still demographically inferior precisely because of the way in which and to whom Android devices are marketed. Unending BOGO promos attract a seemingly unending stream of cheapskate freetards just as inane, pointless TV commercials about robots or blasting holes in concrete walls attract meatheads and dullards, not exactly the best demographics unless you’re peddling muscle building powders or grease monkey overalls.
Google made a crucial mistake: They gave away Android to “partners” who pushed and continue to push the product into the hands of the exact opposite type of user that Google needs for Android to truly thrive. Hence, Android is a backwater of second-rate, or worse, app versions that are only downloaded when free or ad-supported – but the Android user is notoriously cheap, so the ads don’t sell for much because they don’t work very well. You’d have guessed that Google would have understood this, but you’d have guessed wrong.
Google built a platform that depends heavily on advertising support, but sold it to the very type of customer who’s the least likely to patronize ads.
iOS users are the ones who buy apps, so developers focus on iOS users. iOS users buy products, so accessory makers focus on iOS users. iOS users have money and the proven will to spend it, so vehicle makers focus on iOS users. Etcetera. Android can have the Hee Haw demographic. Apple doesn’t want it or need it; it’s far more trouble than it’s worth. – MacDailyNews, November 26, 2012
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