Samsung reportedly wants to replace Google as a search engine

Rumors that the smartphone manufacturer Samsung wants to replace Google with Bing as the default search engine on its Galaxy smartphones could play into Apple’s hands. At least that’s what Bank of America analyst Wasmi Mohan thinks. According to Mohan, Apple has struck a deal worth about $20 billion with Alphabet, Google’s parent company, to make Google the default search engine on all iPhones and iPads. But Apple could be in a better negotiating position when the contract expires later this year.

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The Bing search engine was enriched by the owner Microsoft with the technology of the AI ​​bot Chat GPT. That could be a reason for Samsung to scrap Google as the preferred option on its smartphones. “The emergence of Microsoft as a potential alternative to Google puts Apple in a better bargaining position. Apple can charge more for Google’s attractive position on more than two billion Apple devices,” Mohan wrote in a report.

Apple might consider switching to Bing

Mohan says that under the current deal between Apple and Alphabet, the iPhone maker gets an estimated 80 percent of revenue from mobile traffic generated by Google searches. The deal has long brought Apple billions in annual revenue with a high profit margin. “Apple has a long-term relationship with Google in which it receives attractive, low-risk, high-margin revenue streams,” argues the analyst.

But as Bing grows by integrating Chat GPT, Apple could sit down with Alphabet again to discuss even better terms for the deal. Apple may even consider a switch to Bing when its current deal with Alphabet expires at the end of the year. According to Mohan, Apple could charge a larger share of the revenue per search generated.

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However, should Apple switch to Bing as the default search engine, it could pose a significant risk. In this case, if users decide to switch the default search engine back to Google, the number of searches for Apple would drop sharply. “A higher price per search would not compensate for the loss of market share in the overall search market. If Google can pay more for searches, Microsoft could have a hard time competing for the contract,” Mohan said.

This article was translated from Dutch by Victoria Niemsch. You can find the original here.