Apple is getting ~$1 billion per year from Google to make Google the search default on iOS devices, according to a Morgan Stanley report.
Analyst Scott Devitt at Morgan Stanley put Google on his "best ideas" list for investments on Friday, in a report titled, "The Next Google Is Google."
The gist of his bullishness: he believes Google's search business has room for revenue growth and YouTube has an opportunity to generate billions in more sales.
As a part of his look at Google, he dug into the mobile business. He has an estimate of how much Google pays Apple for the right to be the default search engine on iOS devices like the iPhone, iPad, and iPod Touch.
In the past, some analysts have estimated that Apple has a revenue sharing deal with Google on iOS search. So that for every one dollar of search advertising collected on an iOS gadget, Apple gets 75 cents.
Devitt thinks Apple wouldn't do a revenue sharing deal with Google because it's too messy. He thinks Apple would do a fee per device because it's easier for accounting and it gives Apple upfront payments. It's also a hedge against users going to Google.com and searching from there instead of the default search box on iOS.
Read more: How Much Money Apple Makes From Google For Every iOS Device It Sells - Business Insider
Analyst Scott Devitt at Morgan Stanley put Google on his "best ideas" list for investments on Friday, in a report titled, "The Next Google Is Google."
The gist of his bullishness: he believes Google's search business has room for revenue growth and YouTube has an opportunity to generate billions in more sales.
As a part of his look at Google, he dug into the mobile business. He has an estimate of how much Google pays Apple for the right to be the default search engine on iOS devices like the iPhone, iPad, and iPod Touch.
In the past, some analysts have estimated that Apple has a revenue sharing deal with Google on iOS search. So that for every one dollar of search advertising collected on an iOS gadget, Apple gets 75 cents.
Devitt thinks Apple wouldn't do a revenue sharing deal with Google because it's too messy. He thinks Apple would do a fee per device because it's easier for accounting and it gives Apple upfront payments. It's also a hedge against users going to Google.com and searching from there instead of the default search box on iOS.
Read more: How Much Money Apple Makes From Google For Every iOS Device It Sells - Business Insider
