Analysts think that the Justice Department’s Antitrust attention on Google can eventually lead to having dooming effects on Apple’s profits

The Department of Justice is finally shedding light on Google’s monopoly and its un-contested reign as a key search engine and a browser. An antitrust lawsuit has recently been filed against the tech giant for the same issue.

However, some analysts are very concerned about this antitrust attention on Google, because it can directly affect another tech giant’s business, and that is Apple.

According to some researches, Google pays a hefty amount of around $8 to $12 billion per year to remain as the default search engine on the Safari browser for iPhone and iPads. And when Apple gives this placement priority to Google, it gives it a chance to cover more than 36% of search queries in America only. Naturally, everything is about mutual benefit, so Apple gets to have a place in almost 50% of search traffic on Google according to a 2019 estimate.

Now, the money that Apple gets from Google is used in its various services plans, and this has resulted in Google becoming a source of almost 17.7% of Apple’s total revenue. This percentage equates to almost $46.2 billion in total sales in fiscal last year. This is how Google has played and continues to play a pivotal role in Apple’s business, and that is exactly the reason why analysts are worried now with Google in the line of fire of the Department of Justice.

Apple’s ‘services’ business includes direct subscription facilities like Apple Music, Apple TV+, iCloud Storage, upcoming Apple One bundles, etc. These ‘services’ are responsible for raising the revenue for the company so much that the company’s net worth is now more than $2 trillion! Now, another point to note here is that the revenue from these services also includes the sales from iTunes and streaming services of Apple, App tax from the App Store, and in-app purchases too. The services revenue also includes AppleCare’s warranties and licenses for Google’s traffic acquisition and TAC payments.

Now, this means that Google is responsible for 17% to 26% of the total revenue generated by Apple’s services! And the Department of Justice has a lot of problems with that because it means that Apple’s business is kind of dominated by Google. And this is what the DOJ is fighting against- Google’s dominance over others and its monopoly to continue to dominate!

Rod Hall, an analyst has written that Apple’s services are not excellent or completely fool-proof, but Google’s TAC payments seem to be the biggest contributor to the overall revenue generation through Services.

Let us see the result of this feud between the DOJ and Google, and how it will eventually impact Apple.

Previous Post Next Post