Apple defends its $20 billion Google deal by downplaying its importance
Google searches on iPhones are declining for the first time ever as people — and Apple — move to AI, so there’s no need to worry about our fusty old Google Search contract. That’s roughly the argument Apple Senior Vice President of Services Eddy Cue gave yesterday during a Google antitrust hearing, a clever defense of the company’s $20 billion deal with Google to make it the default browser on iPhones.
But as Bloomberg’s Mark Gurman points out, Apple has about 20 billion reasons to downplay the deal, which represents about 5% of its revenue and has been helping drive its lucrative services revenue.
“Cue’s disclosure of Apple’s plan to shift its browser to AI systems had a clear goal: downplaying the importance of the existing Google deal. If the industry has changed and there are now clear alternatives to Google, the judge may decide there’s no reason to upend the long-running agreement. Cue spent time praising these rival options, including Perplexity’s service in particular.
‘It is logical that Apple might highlight data points supporting the narrative that Google is not anticompetitive in search,’ Jefferies LLC analyst Brent Thill said in a note.
But Apple and Google have the opportunity to deepen their partnership around artificial intelligence — something Cue didn’t focus on. Google has already pivoted to its own Gemini AI system for search. When users make a query via Google, they are often first presented with an AI result. That’s true even on iPhones, iPads and Macs today.”
Apple, of course, has been discussing adding Google’s Gemini AI to iPhones this year.
But as Bloomberg’s Mark Gurman points out, Apple has about 20 billion reasons to downplay the deal, which represents about 5% of its revenue and has been helping drive its lucrative services revenue.
“Cue’s disclosure of Apple’s plan to shift its browser to AI systems had a clear goal: downplaying the importance of the existing Google deal. If the industry has changed and there are now clear alternatives to Google, the judge may decide there’s no reason to upend the long-running agreement. Cue spent time praising these rival options, including Perplexity’s service in particular.
‘It is logical that Apple might highlight data points supporting the narrative that Google is not anticompetitive in search,’ Jefferies LLC analyst Brent Thill said in a note.
But Apple and Google have the opportunity to deepen their partnership around artificial intelligence — something Cue didn’t focus on. Google has already pivoted to its own Gemini AI system for search. When users make a query via Google, they are often first presented with an AI result. That’s true even on iPhones, iPads and Macs today.”
Apple, of course, has been discussing adding Google’s Gemini AI to iPhones this year.
