It is being speculated, that Google will pay Apple somewhere around $3 billion this year, a $1 billion increase from previous years. Google’s licensing fees make up a large bulk of Apple’s services business.
Recently, Apple has been attempting to sell its services by either a direct or persistent approach.
“Court documents indicate that Google paid Apple $1B in 2014, and we estimate that total Google payments to Apple in FY 17 may approach $3B,” analyst A.M. Sacconaghi Jr. has said.
“Given that Google payments are nearly all profit for Apple, Google alone may account for 5% of Apple’s total operating profits this year, and may account for 25% of total company OP growth over the last two years” he added.
Sacconaghi said that Google might back away from paying Apple any amount if it feels confident enough that the search engine is so popular that Apple won’t include any other option.
Simultaneously, he said that Apple’s iOS devices contributes about 50 percent to Google’s mobile search revenue, which means Google might be too afraid to walk away. Which is why it might be win-win approach for both the parties.
