A US based research firm says that Google is going to pay $3 billion to Apple to remain default search engine on iOS devices. The search engine giant is already paying $1 billion since 2014. Google has confirmed in the note to investors that it will increase the amount from $1 billion to $3 billion for this year. This would prove a good profit for Apple’s services business. This license fee from Google comprises about 5% of Apple’s total operations profit.
Apple already says that its services business is growing at fast speed. The company is also expecting that in the near future the profit from services sector will help in listing it in Fortune 500 companies. And, this licensing fee from Google is the total profit for the services segment. An analyst from Bernstein also says that iOS devices also contribute 50% profit to Google’s mobile search revenues. Thus, both the companies are dependent on each other.
The court documents show that Google is paying $1 billion to Apple as licensing fee. And, this fee will increase to $3 billion from this year. Google is increasing the fee because it does not want to cancel the license. This is because Google is also earning a lot of profit from this mobile searching facility.
The analyst also says that services segment has emerged as an important part of Apple’s business. Investors are of the view that this growth is due to iTunes and Apple’s music. But, the revenues show that this licensing revenue is going to become the largest revenue in this sector. Apple’s services revenue has increased about $2.4 billion in last two or three years. The licensing fees are about $500 million which shows that 25% of profit is coming from this licensing sector.