

Apple is About to Reduce Google's Revenues - rblion
http://www.forbes.com/sites/timworstall/2012/06/09/apple-is-about-to-reduce-googles-revenues/

======
andybak
At one point he states: "Google charges Apple for having Maps loaded onto that
Apple hardware. And as I’ve noted before, this is a substantial sum: rather
more than Google currently makes from Android for example."

but the quote he uses (his own) to support this actually combines search and
maps with no indication of the proportion of revenue between the two products:
"The figures also suggest that Apple devices such as the iPhone, which use
products such as its Maps as well as Google Search in its Safari browser,
generated more than four times as much revenue for Google as its own handsets
in the same period." [
[http://www.forbes.com/sites/timworstall/2012/06/09/apple-
is-...](http://www.forbes.com/sites/timworstall/2012/06/09/apple-is-about-to-
reduce-googles-revenues/) ]

Also - This calculation was debunked shortly after it was published:
[http://marketingland.com/no-google-doesnt-make-four-times-
mo...](http://marketingland.com/no-google-doesnt-make-four-times-more-off-the-
iphone-vs-android-9017)

~~~
mtgx
I remember there was a lot of misunderstanding about Google's revenues from
Android when everyone started writing articles about it a few months ago. Most
of their "facts" came from 2010, when Google still had like 4% of the US
market, and Apple had like 20-23%. And somehow they extrapolated that to mean
that Google also makes 4x less from Android _right now_. But Google has grown
much faster than Apple since then, and by now Google has caught up even with
the total amount of iOS devices (iPhone, iPod touch, iPad), and they both have
around 350 million devices on the market. So it's very unlikely that Google is
still making much less from Android than they do from iOS.

There's another similar kind of misunderstanding whenever Apple releases the
"money they have paid to developers". First they forget that Apple only ever
mentions the _total_ amount they have paid since the App Store was created in
2008.

They also forget that again, Apple had a huge headstart in both number of apps
and in number of units in the market until late 2010 or so, and that only more
recently they've had about the same amount of apps and number of units in the
market as Apple.

So when you compare the "total amount" Apple has paid to devs to Google's
"total amount" that they paid to devs, obviously Apple will come out on top
because of their huge headstart in the first 2-3 years. But if you compare the
last quarter or last year for both, which is a lot more relevant for devs,
because they'd want to know how much they can make right now, Apple might
still come out on top, but the difference should be a lot smaller, and
definitely not something like $3 billion vs $100 million.

Hopefully the "Apple media" will remember this before they start slamming
Google when Apple will release their new numbers, without really understanding
the context of those numbers.

~~~
huxley
You're misremembering things, Google had already passed Apple in US
marketshare in 2010:

[http://articles.latimes.com/2010/may/12/business/la-fi-
googl...](http://articles.latimes.com/2010/may/12/business/la-fi-google-
apple-20100512)

In the US, Google accounted for 28% of smartphones versus Apple's 21%.

Apple opened its App Store in July 10, 2008. Google opened up its Android
Market in 22 October 2008.

If you follow Apple's conference calls, you'd realize that Apple gives
frequent updates of the amount being paid out to developers. In the last
quarter, Apple paid developers approx. $500 million. So far as I can see,
Google doesn't release figures for what they pay Android developers in either
app or ad revenues.

If Google was to be more transparent with their revenues and how much Android
developers receive, then there could be a genuine accounting for how each
platform is doing, but ironically in these instances Apple is far more open
than Google.

------
pan69
How much is Apple's market share these days? I thought Android was still the
major platform and I didn't think Google would be lying awake at night from
this.

~~~
ditoa
Android may have a bigger install base but they also seem to have a much
bigger group of "low power users". These are the people such as my step-dad
and some of their friends who bought a cheap Android phone as it was the same
price as a old style candy bar or flip Nokia but it had a much bigger screen
with adjustable text size (superb for their aging eyes) but they do _nothing_
on the phone that would be considered "smart". They call and they text. That
is it. Whereas I don't know anybody who would buy an iPhone and then not use
all the smart phone features. Hell I know at least 6 people (not conclusive
but interesting IMHO) who own Android phones but don't even have a Google
account so have never download an app or even opened the web browser or maps
built in apps.

With the death of the old mobile phones and the rise of the smart phone
someone had to pick up the place of the LCD, with the much lower entry level
of Android on dirt cheap hardware it is clear that Android has picked up the
crowd of "I just want a phone that makes calls" crowd which I can't see Google
making any money out of.

~~~
fpgeek
Note that Google counts activations, not devices, so if those friends really
don't have a Google account (more plausible than I'd thought - I was recently
surprised how easy it is to skip that step of the setup wizard these days,
even on stock Android. That's a change from the G1 days, IIRC), they wouldn't
be counted.

On the other side, I suppose you could ask how many people use iPod Touches as
pure music/video players, though the music player market is getting less
important with time, unlike feature phone conversions.

~~~
gte910h
I don't think it's "Google Account" activations, but cell phone activations.

------
ravivyas
How much does Google earn from Maps anyway? Remember it was free till last
year.

~~~
taligent
Google advertises in Maps.

So even though it is free they are still making money.

~~~
magicalist
You guys are conflating two things. Google starting charging for the Maps API
last year. They don't currently run any ads on the Maps API. Apple does not
use the Javascript Maps API for their current iOS maps.

------
sgt101
The thing is, replicating Google search in terms of quality is very hard now
(it is really, _really_ clever) but 99% of users simply won't notice the
difference between the awesomeness of Google and the pretty goodness of
anything else. So - the question is : why don't Apple do this?

~~~
vladd
It's a dangerous line of thought (there's a saying, "people who forget history
are doomed to repeat it"): it is this awesomeness that allowed Google back in
2000 to overthrow the market incumbents at that time, Altavista, Hotbot and so
on. Don't underestimate the power of "awesomeness", in search at least a
significant number of users are ready to jump ship whenever something better
and with less junk appears.

~~~
fear91
I agree - many people are waiting for Google's replacement. People were
laughing at Bing's quality, but it is really on par with Google right now.
It's just that people are habituated to use Google's search. You can test this
with this tool:

<http://blekko.com/ws/+/monte>

Truth to be told, Google search results are worse than few years ago. At the
same time, they look more and more like a christmas tree - ads and other junk
(google products?, google plus results?) everywhere.

~~~
faulty
I don't trust the results of that website.

Compare: <http://blekko.com/ws/c%23+get+custom+attribute+/monte>

With:
[http://www.google.com/#hl=en&q=c%23+get+custom+attribute](http://www.google.com/#hl=en&q=c%23+get+custom+attribute)

Blekko claims the first google result is "C: Summary for Citigroup, Inc.
Common Stock- Yahoo! Finance", while google finds the relevant information.

~~~
nuttendorfer
That's because Google knows what you want based on their tracking information
and previous searches.

~~~
jrockway
Doesn't Bing do this too?

------
visa
Guys checkout how much Apple is paying to it employees
[http://www.visasquare.com/visa-greencard/salary/apple-
inc-20...](http://www.visasquare.com/visa-greencard/salary/apple-
inc-206108.html)

------
ifureadthisumad
google is starting to lose people's trust and now revenues from partners. not
looking good for google...

~~~
dansul
> google is starting to lose people's trust

What indications tell you that Google is loosing people's trust, besides your
own ?

~~~
fear91
Google is the next Microsoft.

<http://www.youtube.com/watch?v=BslAhJ5-C9g>

