The fees will continue to add large portions to Apple's services revenue into 2019, however, it will be growing at slower rates, added the Goldman Sachs analysts.
Apple Inc has recently come under scrutiny for its slowing iPhone sales and how the company is not doing as well as it used to do. However, a new report says that Apple could be making money in other ways.
Goldman Sachs has estimated that Apple was paid nearly $9.5 billion by Google in traffic acquisition costs (TAC) in 2018, a CNBC report quoting Goldman Sachs analyst says. This makes up for over 20 percent of Apple’s services profit that comes from the search engine giant.
The fees will continue to add large portions to Apple’s services revenue into 2019, however, it will be growing at slower rates, added the Goldman Sachs analysts.
This fee was paid as Google insisted on being the default search engine on Apple’s Safari browser. This revenue adds to Apple’s budding services segment, that includes iCloud, App Store and Apple Music revenue.
As iPhone sales slow down, the company sees its services revenue as the next growth driver. However, the share of this segment from Google is reducing, the analysts noted and therefore Apple would need to make up for the slowing revenue with an ‘Apple Prime’ bundle, including the original video which is expected to be released in mid-2019, the note by Goldman Sachs was published on Monday.