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Google paid Apple $3 billion to remain the iPhone’s default search engine

Apple has never given the exact number, but Google pays a substantial amount of money to remain the default search engine on i-Phones and i-Pads. A new analysis estimates that Google may be paying Apple upward of $3 billion a year. Based on that estimate, Google may account for 5% of Apple’s total operating profit this year and up to 25% of total operating-profit growth recently, according to the Bernstein research.

The only hard number we know is that Google paid Apple $1 billion in 2014. That $1 billion, specified in court documents, was paid as part of Google’s agreement to pay Apple a percentage of the money Google earns from iPhone and iPad users. The percentage is unclear, but Bernstein cited media reports putting the agreed-upon percentage at 34% “at one point.”

When researchers dug through Apple’s filings and found that licensing revenue, like that which Google pays Apple, is actually the biggest or second-biggest contributor to Services growth. Because of this, Google will pay Apple “closer to $3B” this year.

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