Apple has openly admitted for the first time that its revenue could be at risk if its long-standing deal with Google ends. The company mentioned the fact in its latest quarterly earnings call, surprising investors and analysts. It is the strongest indication yet that the billion-dollar business with the default search engine in Safari is in danger.
Apple is dependent on billions from Google
According to available information Google pays annually Apptens of billions of dollars for being the default search engine in Safari on iPhone, iPad and Mac. For example, in 2022 it was approximately 20 billion dollars, as court documents revealed.
Apple has never explicitly said before that this deal is key to his revenue. That changed on Thursday, when the CFO Kevan Parekh during a call with investors he stated:
"The outlook for the September quarter assumes that current tariff rates and policies remain in place, macroeconomic conditions do not deteriorate, and the current revenue sharing agreement with Google continues."
Antitrust shadow over deal
Complicating the situation last year's ruling by a US federal court, according to which the agreement is Applu and Google in violation of antitrust law. Although no remedies have been ordered yet, Google will almost certainly appeal. However, if the court were to decide to terminate this agreement, the impact on Apple could be crucial.
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CEO Applu Tim Cook expressed himself reticently on the matter:
"I don't want to speculate on the court's decision, what it might look like, or what we would do in such a case."
Uncertainty and growing pressure
For the first time in history Apple itself has admitted that its financial outlook depends on the continuation of the deal with Google. This puts new pressure on both companies and heightens concerns that a possible breakup of the partnership could lead to billions in losses or a change in strategy.
Pro Google is a key distribution channel, while Apple The deal keeps its own exposure to search low while collecting record amounts. Any change in this relationship would shake up the market.
The further development of the lawsuit, which may last several months, will be decisive. Apple Even Google is keeping quiet for now, but investors already know that it's not just about technical details - it's about billions of dollars a year.
