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Why the iPhone is more important to Google than Android

May 27th, 2015 at 5:00 PM
iPhone Vs Android Advertising

Though Google these days has its hand in everything, from robotics to advanced AI, the company’s billions by and large continue to come exclusively from advertising. More to the point, 90% of the $66 billion Google generated in revenue in 2014 came directly from advertising-related ventures

Not surprisingly, an increasingly important part of Google’s advertising machine is mobile search. In 2014 alone, 18% of Google’s ad revenue, or about $11.8 billion, came from searches done on mobile devices.

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What’s interesting, though, is that the iPhone is responsible for 75% of Google’s mobile-based revenue, leaving Android with a surprisingly low and disproportionate 25% share. This is especially jarring given that Android routinely trounces the iPhone when it comes to overall marketshare.

Fleshing out the numbers a bit, iOS devices in 2014 generated nearly $9 billion in revenue for Google while Android, its own mobile OS, generated just under $3 billion. These figures come from a Goldman Sachs analyst report recently referenced in The New York Times.

“Android has so far been an ad dud compared with Apple’s iOS,” the report notes, “whose users tend to have more money and spend a lot more time using their phones (and are, thus, more valuable to advertisers).”

Given that an iPhone user who uses Google for search is more profitable, on average, than a corresponding Android user, it’s hardly surprising that Google pays Apple an estimated 1-$2 billion every year to remain the default search engine on mobile Safari.

Underscoring the importance of the iPhone to Google’s bottom line, consider this: If Apple changed the default search engine in mobile Safari to Bing, Google’s revenue would drop by over 13%.

A life long Mac user and Apple enthusiast, Yoni Heisler has been writing about Apple and the tech industry at large for over 6 years. His writing has appeared in Edible Apple, Network World, MacLife, Macworld UK, and most recently, TUAW. When not writing about and analyzing the latest happenings with Apple, Yoni enjoys catching Improv shows in Chicago, playing soccer, and cultivating new TV show addictions, the most recent examples being The Walking Dead and Broad City.

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