Why is Google 'paying' Apple $9 bn?

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Despite this, Hall says that "Apple is one of the biggest channels of traffic acquisition for Google".

The estimate comes from Rod Hall at Goldman Sachs. If that wasn't enough, it's said that Google's payout to Apple could swell again in 2019 to $12 billion.

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Google will shell out $9 billion this year to remain the default search engine for iPhone's Safari browser on iOS.

Nevertheless, if the report is true, it's a significant chunk of revenue for Apple. What is worse is that Apple enjoys the high profit from the digital advertising without being blamed for the disadvantages of the said digital advertising system. What's more, Hall actually thinks that number will increase by next year, and Google could be paying Apple for those default rights to the tune of $12 billion.

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Apple has been touting that services will be a huge area of growth for the company, as sales of its hardware start to peak. "Though much has changed in the intervening years-including now offering Search in more than 150 languages and over 190 countries-Google is still dedicated to building products for everyone".

If Google is the biggest reason for growth in Apple's services segment - as Apple itself appears to be telling securities regulators - then Apple's purported transformation into an annuity business is far less than it seems. Hardly a surprise, the bulk of Google's revenue still comes from search-based advertising and the company has always been willing to pay somewhat astronomical fees in order to remain front and center on mobile Safari. Make no mistake - that is what Apple is doing by cashing those 10-figure checks from Google. From Apple's perspective, they're getting what essentially amounts to free money.

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Google does not disclose the specific amount of money it pays Apple. However, neither Google nor Apple has ever shared the exact terms of their agreement.

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