The Design Story Behind AirPods 4, Google Stresses Antitrust Long Game
Hello everyone. Tomorrow’s update will be dedicated to discussing Meta's Connect 2024 event. What took place at Menlo Park marked a new kind of low for the consumer tech industry. We will discuss it all tomorrow.
For today’s update, we are going to focus on AirPods. The discussion will then turn to a quick update on the Google antitrust front.
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Apple as a Search Trojan Horse, My Estimates for Google TAC Payments to Apple, Potential Court Impact on Apple Search Revenue
Hello everyone.
Last Wednesday, we discussed the key points regarding the U.S. Justice Department’s courtroom battle against Google. Apple’s default search deal with Google is in the crosshairs. There is room to expand on the topic in a few directions. We go over Neil’s estimates for how much Apple makes from Google TAC. In addition, we discuss the potential impact on Apple’s search revenue if the court rules against Google.
Let’s jump right in.
Apple as a Search Trojan Horse
Over at The Verge, editor-at-large David Pierce wrote about the Google/Apple search deal. Pierce thinks the contract is the “most important” one in tech and has played a major role in shaping today’s online economy.
Here’s Pierce:
“Apple has set Google as the default search engine in Safari across its products for more than 20 years, since the browser’s very first launch in 2003. Over the years, the deal has morphed into a revenue sharing system that sees Google reportedly pay Apple more than $10 billion a year to remain the default. That money or the fact that Google is the best search engine — or some combination of the two, depending on who you ask — has kept Apple from building its own search product, switching to a Google competitor, or allowing users to choose a browser when they set up their phone…
Becoming the default search engine in Safari is a surefire way to get massive global scale. But the [U.S. vs. Google] trial makes clear it’s not just that more users means more searches means more ads means more money. Apple is a dominant player on mobile in particular — it owns about half the smartphone market in the US, and globally, it’s the only meaningful competition to Android, which, of course, Google already owns and controls. The only way any competitor could quickly access many millions of users, and thus the most important moat for Google to protect, is through Safari on iOS.”
The article was worthwhile to read in its entirely, although there were a few parts that caused me to shake my head in disagreement.
While Pierce doesn’t come out and say it, the argument that iOS is the only way to “quickly access many millions of [search] users” against Google amounts to positioning iOS as a search Trojan Horse.
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