More people access the mobile web through Apple (AAPL -0.35%) devices than Google (GOOGL 10.22%) Android devices. As such, capturing the default search engine spot for Apple's iDevices is a pretty big "get" for Google. Of course, the $1 billion Google reportedly sends Apple's way every year in traffic-acquisition fees is key to keeping this relationship alive, as is Google's ability to maintain its technological lead over Microsoft (MSFT 1.82%) and Yahoo!.
Apple, however, has demonstrated a desire to separate itself from Google, as it's grown to become one Apple's biggest rivals. Could we soon see the day where Apple cuts ties with Google completely?
When do the costs outweigh the benefits?
Apple has tried to move away from Google previously. With the release of iOS 6 in 2012, Apple removed YouTube and overhauled Maps to rely on Apple's own data instead of Google's.
What's telling is Apple's decision to take the product in-house instead of finding another partner like Microsoft or Yahoo!. Apple Maps was more about controlling a key feature of the product than separating from Google. To that end, Apple has had mixed success; Safari, Siri, text messages, and Contacts link to Apple Maps, and most developers will default to Apple Maps due to its pre-installation on the hardware. Still, Google Maps installs reached 10 million within days of its release.
Apple isn't interested in developing its own search engine. The costs are much higher than with maps, and the company can't risk another poor launch. That leaves Microsoft and Yahoo! licking their chops for a chance to step in as the default search engine.
Maybe Google would be better off that way
It's interesting to note that Google achieved success with YouTube and its other apps after Apple updated to a more Google-free iOS 6. Previously, Apple controlled the YouTube app and hardly updated it, despite Google's progress in modernizing the desktop and mobile sites. Moreover, Google couldn't monetize the Apple version of the app.
After YouTube's removal from iOS, Google tripled its YouTube mobile revenue in the first six months of last year. Perhaps Apple was handicapping Google by holding its thumb over one of its most popular apps.
With search, Apple may be following a similar strategy: Give people just enough of Google so that they don't abandon Safari. Apple can use Safari to direct people to apps that it prefers, rather than the ones Google prefers.
Comparatively, Google has implemented a feature that allows users to sign in on one iOS app and never again for any other Google apps. As a result, browsing in Chrome or reading email in the Gmail app allows users to open up Google Maps or Google Drive. Apple would much rather have you using Safari than Google's products.
But what are the alternatives?
Google dominates search. It arguably has the best web search technology, but more important, people believe it's the best. Apple is in the business of making the best products, not "pretty close to the best." After the problems with Apple Maps, Apple is unlikely to make any software overhauls that it doesn't think will receive a positive reception.
With Siri, Apple has already taken steps to move away from Google. The software uses Microsoft's Bing to provide search results and answer questions. Apple can get away with this because the average consumer has no idea what goes on behind the scenes with Siri, and the critiques of Bing versus Google don't come into play.
Yahoo! believes that it can make a play for the default Safari search engine. Marissa Mayer has reportedly already talked to several Apple execs, including Jonny Ive, about the future potential of Yahoo! search on iOS. Yahoo! already provides data for Apple's stocks and weather apps.
Search has fallen out of favor somewhat at Yahoo! after the company tapped Microsoft to provide the technology behind Yahoo! Search in 2009. Mobile search is a clever loophole in Yahoo!'s agreement with Microsoft, and may allow the company to regain share in search advertising if it can convince Apple to make the change.
Keep your enemies closer
Apple may be best off adopting the strategy of keeping its friends close and its enemies closer. Yahoo! is a valuable friend, it helps Apple serve its users' weather and stock information. Microsoft is stuck somewhere in the middle, as it has competing mobile and desktop platforms, but provides search technology for Siri.
Meanwhile, Google is Apple's biggest competition, and keeping it around as the search default may be the best thing Apple can do. We saw what happened when Apple tried to separate itself and go its own way previously -- it mostly benefited Google. The demand for Google's products is too high for Apple to completely ditch them.
