Samsung Gets $3B / Apple Gets $20B

That is what the data says...

• Is Samsung thinking about Bing as the default search?

• Google planning to launch a foldable phone?

Google Pays Apple $20B vs. $3B to Samsung

This week, most of the attention was on Netflix and Tesla earnings (see last week for thoughts heading into it), with very little discussion of Google's news. There were reports that Samsung was considering replacing Google Search with Microsoft's Bing as the default search engine on its devices, which could have significant implications for both companies.

One key factor in this is the cost of traffic acquisition for Google, which is around $49 billion per year. This cost is related to driving traffic to Google's search page and generating ad revenue. Microsoft's AI advances with OpenAI (ChatGPT) and the integration of this tech into Bing could provide an opportunity for Samsung to leverage better terms with Google.

This makes sense as Google currently pays Apple roughly $20 billion per year to be the default search engine on Apple devices. If Bing really takes off, and ChatGPT-like search is the future, a switch could be a viable alternative. 

However for now, given that Samsung devices run on the Android operating system, which is owned by Google, it seems more likely that Samsung will choose to maintain a positive relationship with Google. Let’s see how this one plays out...

Was it a coincidence that this week Google announced its ambitions to launch a foldable phone this year? Samsung is the leader in foldable phones at the moment. 

Disclaimer: This is not a recommendation to purchase or sell any securities mentioned.