Google is paying 21B because they expect to lose more than that if they stop.
Which suggests they don’t think people would choose them.
Which suggests they don’t think people would choose them.
Google pays Apple enough not to take the risk in trying. If Apple Search was a hit it would be a threat to Google. There's always the possibility that it would be the next Bing or Apple Maps, an inferior money pit, so Apple is happy to take the cash.
If Apple loses that sweet 21B USD, they will come up with their own search engine for sure.
The biggest market is mobile now, and people on mobile don't open their web browser on their phone and start typing google.com before they search for something like people used to do on desktops 20 years ago, but they search for something directly in the built-in browser's address bar whichever search engine that might be, as most people stick to the default on their device whichever those might be. Defaults matter.
Apple could probably switch the default search engine in Safari to anything else and most users wouldn't bother changing it back to Google unless the results were to be absolutely terrible.
google is paying that much because otherwise microsoft would be paying close to that. there is no innovation in the search space, there is only a battle of cash.
Apple doesn’t have a monopoly on their platform. They make a platform that’s part of a market. And they have a minority portion of that market.
That’s like saying Folgers has a monopoly on Folgers coffee. The sentiment is kind of right, they are the only ones who make Folgers, but it’s not the right term as being an exclusive manufacturer is not a monopoly in terms of anti trust or this conversation.
Not justifying apples tactics though.
> Apple doesn’t have a monopoly on their platform. They make a platform that’s part of a market. And they have a minority portion of that market.
I don't think "a minority portion" means anything, since illegal activities are still illegal. I.e. collusion doesn't become legal just because you're a small company. And again, I think it'd be pretty easy to identify more than a few markets where Apple very clearly has an overwhelming market share.
The delusion about Apple’s “monopoly” has to ignore all precedent and legal definition of monopoly and hinge on not liking how they run their business. Then don’t do business with them. They have a minority share in phones, tablets, computers, and effectively every other market they’re in.
Not quite. We should apply a bit more nuance, yes iPhones and Android phones more or less can do the same things but they aren't entirely replaceable and not a commodity like coffee.
The simple fact that people swap between Android phones and Apple phones without buying both means they are in completion. Making cellphone (edit: operating systems) a duopoly not a monopoly.
Markets aren’t quite arbitrary but they are subject to debate. Someone considering buying a new 911 likely isn’t going to consider buying a base model Honda Civic as an equivalent good but a Lotus Emira might qualify.
But my point is you can slice and dice markets in multiple ways, however brands themselves don’t qualify as a market otherwise every brand would be a monopoly and the word stops being meaningful. It’s the expensive watch market not the Rolex watch market.
Apple approach of locking their software to the hardware supposedly gives better result, but this has not been true for quite a while and doesn't actually give many benefits to the end user (cue the refrain for ecosystem gimmicks).
Don't agree they are subtle or minor (it's of course a scale and coffee is objectively, based on consumer behavior and preferences, way lower on it than smartphones or PCs).
> fact that people swap between Android phones and Apple phones
Some do. Some don't, of course not's not an entirely distinct market, only partially (just like tablets vs smartphones or laptops vs tablets just too a much smaller extent).
The degree to which something acts as a substitute generally defines the market. If Apple discontinued the iPhone without any substitute some people might replace it with laptops, but the vast majority are going to buy an Android phone.
For example they were able to force banks to agree to support Apple Pay. And it’s the wielding itself that is sufficient proof of the trust violation.
Apple didn’t force anyone to participate in Apple Pay anymore than Samsung did to get banks to Support Samsung Pay. Mobile payments also started well before Apple got in on them.
Banks got onboard because customers like the convenience, so if customers had a non mobile card and a mobile card many of them would prefer the mobile card. That’s not monopolistic power, that’s the free market at work.
Merchants don’t need to do anything it’s the 3rd parties making payment machines which needed to support Apple/Samsung/Android etc and they are competing in a market where Apple Pay is just another feature they can use to differentiate themselves. So again free market forces.
We’re on different planets.
> Banks got onboard because customers like the convenience
… Banks in Australia fought it for years.
Your point about 20% market share being enough demonstrates the point. There’s no set percentage of customers. The wielding of power alone demonstrates the issue.
There’s no magic percent of a market that proves or disproves the sort of behaviour that antitrust laws are designed to prevent.
This is why companies argue they aren’t monopoles, because if they aren’t then the behavior is legal. This is why your car insurance company can offer discounts if you get a life insurance policy through them. The government supports insurance bundling etc because it’s actually economically beneficial as long as it’s not a monopoly trying to get into a new market.
Thus apple had tremendous market power in “fact”, even if the raw numbers looked much smaller.
So long.
I’m only half kidding here as companies dropping Apple in mass would eventually get people to swap. Though I suspect an Android only ecosystem would quickly become even worse for developers.