Apple is paid about $3 billion a year to use Google as their default search engine on iOS. It might be the most profitable thing Apple does.
Think about this for a second. That is $3 billion without any significant engineering effort, investment in technology, or anything else.
That Is $3 Billion Of Pure Profit
Apple’s profit margin is about 35% gross profit, so for sanity’s sake, let’s call it 1/3 gross margin.
It would take Apple an additional $9 billion in revenue to get $3 billion in profit.
For comparison’s sake, most tech companies would be thrilled to even add another $1 billion in revenue, much less profit.
For example, Twitter’s total revenue is $2.5 billion in 2017. And Twitter’s net income was a loss of over $100 million.
Twitter Has Never Even Made Close To $1 Billion In Profit
In fact, you could go through a big list of well known tech companies and find that $3 billion profit is pretty hard to come by.
So, from a business standpoint, Apple is likely making more money by NOT having a search engine than by building their own.
Now, if you compare this to the time and effort and resources it would take to build a search engine to compete with Google and Bing, it becomes obvious why Apple hasn’t gone down this road.
Not Building A Search Engine Is A Smart Move
By investing in the iPhone, iPad, and Mac, Apple is using their resources better than if they built a search engine.
I’d say that’s a smart move.
It’s a whole lot smarter than lighting $30,000,000,000 on fire to compete with Google.