Google to pay Apple $3 billion to be default search engine on iPhone

Google alone may account for 5% of Apple’s total operating profits this year, and may account for 25% of total company OP growth over the last two years.

Google had paid $1 billion to Apple in 2014. (Google)

US-based research and brokerage firm Bernstein claims that Google has agreed to pay about $3 billion to Apple this year to be the default search engine on iOS devices.

According to a note to investors on Monday, Google has increased the amount this year -- from $1 billion three years ago to $3 billion this year -- and Google's licensing fees make up a large bulk of Apple's services business.

"Court documents indicate that Google paid Apple $1B in 2014, and we estimate that total Google payments to Apple in FY 17 may approach $3B," CNBC quoted analyst A.M. Sacconaghi Jr. as saying.

"Given that Google payments are nearly all profit for Apple, Google alone may account for five per cent of Apple's total operating profits this year, and may account for 25 per cent of total company OP growth over the last two years," he added.

Apple's iOS devices contribute about 50 per cent to Google's mobile search revenue, Sacconaghi noted.