Apple nets over $100 million per year via Google search on the iPhone

Thu, Feb 11, 2010


Citing a source “familiar with Apple’s operations”, Silicon Alley Insider is reporting that Apple, contrary to some previous reports, has no intention whatsoever of building its own search engine from the ground up. The most sensational item from the report, however, is that Apple’s partnership with Google on the iPhone nets Apple over $100 million a year in revenue.

Now $100 million may just be walking around money for Apple, but it certainly is a significant enough amount of change to dissuade Apple from putting its own money into search when a) Google already has the search market locked down and b) it gets paid to make Google the default search engine on the iPhone.

But despite Apple and Google’s close partnership on a number of initiatives, the relationship between the two companies is clearly strained. To wit, SAI notes that negotiations between Apple and Google over something as innocuous as Google Maps has turned into an all out battle.

Our source tells us when Apple first introduced the iPhone, it hammered out its deal for Google Maps in two weeks. When Apple prepared to launch the iPhone 3G with GPS a year later, it was a six-month process “full of acrimony” to get the maps deal finished.

Google wanted access to all sorts of data from the maps, but Apple didn’t want to give it up, according to this person.

That’s an interesting piece of gossip because Apple purchased a mapping company called “PlaceBase” last July. Before being acquired by Apple, PlaceBase was a paid map service that actually came before Google Maps, but soon found itself unable to compete with Google when it released Google Maps for free. Shifting gears on the fly, PlaceBase differentiated its service by offering customers novel map customizations and interesting aggregation options, such as the ability to overly crime data over corresponding locations on a map.

It remains unclear if Apple and its newly founded “Geo Team”, which is now headed up by the former CEO of PlaceBase, has plans to release its own mapping software in place of Google Maps, but given Apple’s appetite to control as much of the underlying technology in its products as possible, not to mention the growing riff between Apple and Google, we wouldn’t be surprised if Apple is working hard to develop in-house mapping technology that would render Google’s role in Apple’s current Maps app superfluous.


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