Apple’s services revenue could face a significant blow due to the scrutiny of its AI deal with Google following a U.S. judge’s ruling on Google’s monopoly in the search engine market. The Information Services Agreement (ISA) between Apple and Google requires Google to be the default search engine on Apple devices, with Google paying Apple a substantial amount of the search revenue generated. The recent ruling could lead to changes in how search engines are set as default on Apple devices, potentially impacting both companies financially.
The potential termination of the ISA could result in a 4-6% decline in Apple’s profits, affecting a significant portion of its Services revenue. The deal, established in 2002, has been a key revenue source for Apple, contributing to its overall annual revenue. Apple’s Services segment, which includes platforms like Apple Music+ and Apple TV+, has been growing rapidly, but the Google deal remains crucial to its financial performance.
To address regulatory concerns, Apple is exploring alternative AI partnerships and considering incorporating new AI models. The termination of the ISA could also have financial implications for Google, potentially leading to a significant loss in search volume and revenue. Both companies may need to make substantial changes to their business practices if the ruling is upheld, impacting their financial stability.
Overall, the ruling highlights the complex relationship between tech giants like Apple and Google, emphasizing the financial risks associated with exclusive agreements and potential antitrust issues in the industry.
2024-08-12 03:15:03
Post from www.ibtimes.com