Apple could decide to buy search engine DuckDuckGo and replace Google's search engine on its smartphones
Google today pays $7 billion a year to Apple to be the default search engine on iOS devices and, from this investment, makes $15 billion. A compromise that suits both companies but that, according to financial analyst Toni Sacconaghi of Bernstein, might not last long.
According to Sacconaghi, in fact, Apple should shake up the market and, to do so, it would have at least two options: replace the agreement with Google with an equivalent agreement with Microsoft, thus switching to Bing as default search engine on iOS, or buy DuckDuckGo, the independent search engine very focused on users' privacy. According to Sacconaghi, both options would be viable, but the second would be the better fit for Apple. In both cases, however, according to Sacconaghi, it would not be a catastrophe for Google, which, however, would be forced to make countermoves.
Apple leaves Google: the Microsoft Bing option
According to Sacconaghi, Apple might not renew the agreement with Google and sign an equivalent one for value with Microsoft. To the Redmond's house the deal would be good, because Bing would be enough to reach a third of Google Search users to generate profits and with the agreement with Apple, Microsoft would be able to grab in one shot only 13% of the mobile market. The rest could be obtained on desktop, thanks to the Bing-Windows integration. For Apple it would be an economically equal change, but it would have the advantage of putting pressure on Google that, with Android, dominates the mobile operating system market.
Apple leaves Google: the DuckDuckGo option
The second option, the one that foresees the purchase of DuckDuckGo, instead foresees costs for Apple: it would have to give up 7 billions a year and, in addition, pay about one billion for the acquisition of DuckDuckGo. In theory, this is the least advantageous option, but perhaps not. On the one hand, in fact, DuckDuckGo is the fourth most used search engine in the United States but is almost unknown elsewhere, on the other hand it has a focus on privacy that fits perfectly with Apple's policy. The bitten apple, in fact, for several years now has positioned itself on the market as the most reliable option for users looking for secure and unobtrusive devices. From an economic point of view, in any case, the operation would not be terrible for Apple, which closed 2019 with net earnings of $55 billion.