Lucrative Apple-Google Default Search Engine Deal Threatened with Antitrust Lawsuit

Apple’s lucrative deal with Alphabet subsidiary Google that will make Google search the default in Safari faces an uncertain future due to an impending antitrust lawsuit from the U.S. Department of Justice. information reports.

The partnership is a financial powerhouse for both companies. Apple reportedly earned more than $20 billion in 2022, accounting for 36% of ad revenue from Safari searches. Google, for its part, risks losing access to 70% of iPhone searches if the lawsuit fails. That would have a significant impact on its $207 billion in mobile search ad revenue in 2023.

Sensing the potential threat, Google has been actively pushing iPhone users to use its own apps, Google and Chrome. They’ve invested in features like Lens image search and personalized content feeds, as well as extensive advertising campaigns to highlight the apps’ exclusive features. But the results haven’t been impressive – iPhone searches conducted through the Google app have only increased from 25% to the low 30% range over the past five years, information reports.

Google recently hired industry veteran Robby Stein to lead user acquisition for its iPhone apps. He’s exploring ways to use generative AI to make Google apps more engaging. Their goal is to double Google searches outside of Safari, despite stunted user growth in Google Apps and Chrome.

This change is crucial for Google to cushion the potential blow from the lawsuit. A negative ruling would not only impact its revenue, but also set a precedent for how regulators view Apple’s default settings and competitive practices.

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MacDailyNews Opinion: Oogle pays Apple tens of billions of dollars a year to be the default search engine on Safari because Mac, iPhone, and iPad users are an incredibly desirable demographic (for any for-profit company) as opposed to those who settle for knockoff iPhones.

In September 2023 AsymcoHorace Dediu of The New York Times did the math and came to the conclusion that Apple iPhone owners 7.4 times more valuable than those who choose Android phones.

Real iPhones vs. Poor People’s iPhones. Same old story as always. — MacDailyNews, April 22, 2022

Bottom Line: Those who make do with Android devices are not equal to iOS users. The fact is that iOS users are worth significantly more than Android users to developers, advertisers, third-party accessory manufacturers (speakers, cases, chargers, cables, etc.), vehicle manufacturers, musicians, TV producers, movie producers, book authors, carriers, retailers, podcasters… the list goes on.

Customer quality matters. A lot.

Simple “analyses” that only consider market share (individual), equating one Android user to one iOS user, make the fatal mistake of incorrectly equating each platform’s users on a one-to-one basis.

When it comes to mobile operating systems, not all users are created equal. – SteveJack, MacDailyNews, November 15, 2014

Android is intended for users who generally:

a) they do not know why they should choose an iPhone over an inferior counterfeit, and therefore may be less inclined to understand/discover the capabilities of their devices or to enter credit card information on them when shopping; and/or
b) tempted by offers such as “Buy One Get One Free”, “Buy One Get Two or More Free” or similar ($100 gift cards with purchase).

Neither customer type is the best in terms of successful engagement or desired demographics; closer to the bottom of the barrel than the top, in fact. Android can be widely adopted and still demographically inferior precisely because of how and to whom Android devices are marketed. Endless BOGO deals attract a seemingly endless stream of miserly freeloaders, just as pointless, meaningless TV ads about robots or blowing holes in concrete walls attract musclemen and dullards, which is not the best demographic unless you sell muscle-building powders or grease monkey suits.

Google made a fundamental mistake: it handed Android over to “partners” who pushed and continue to push the product into the hands of the exact opposite type of user Google needs for Android to truly thrive. Hence, Android is a second-rate backwater, or worse, versions of apps that are only downloaded if they are free or ad-supported – but the Android user is notoriously stingy, so ads don’t sell much because they don’t work very well. You’d think Google would understand this, but you’d be wrong.

Google created a platform that relies heavily on advertising support, but it sold it to the exact type of customer who is least likely to use advertising.

iOS users buy apps, so developers focus on iOS users. iOS users buy products, so accessory manufacturers focus on iOS users. iOS users have money and a proven willingness to spend it, so car manufacturers focus on iOS users. Etc. Android may have Hee Haw demographic. Apple doesn’t want or need that; it’s far more of a hassle than it is worth. – MacDailyNews, November 26, 2012
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