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For Apple it could just be a customer acquisition cost.

Google pays Apple a lot of money to be their search engine. Presumably, if they became a competitor, Google would stop the $15 billion payments and Apple might want to make that up.

Yes, by acquiring new customers who then buy further products and services.

It could also just be sold as a service, or an addition to iCloud+.

The loss of that payment would be part of the business model, but companies really don’t think in terms of making list revenue up.

If there is an opportunity to increase revenue (subject to mission/values/etc), you take it. A decrease in another line of business doesn’t matter. Or an increase; you wouldn’t say “hey we’ve got this amazing ad opportunity but the AirPods business is killing it so let’s not bother.”

I guess the nuance here is that the business decision might be “our search, with our ads” versus “Google’s search, with their ads, plus $15B/year”. In that case I think there’s a reasonable argument that users are better off with Apple’s ads than Google’s.

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