Analyst Gene Munster from Piper Jaffray has written a new a note to investors. Munster has suggested that about 2% of Google’s annual revenue comes from the iPhone.
Munster’s note highlighted Apple’s reasons for extracting Google (more specifically Google Maps) from the iOS platform. There are speculations (and expectations) that an announcement will be made next week at Worldwide Developers Conference (WWDC) where Apple is said to announce its own replacement for Google Maps.
Munster’s insights about Google revenue from the iOS platform:
We estimate Google will generate gross mobile revenue of ~$4.5 billion in 2012 with approximately $500 million coming from display and $4 billion from search. We believe iOS is likely to be the biggest or close to biggest portion of mobile search revenue. Assuming the iOS generates around 40% of total mobile search revenue ($1.6 billion) and Google keeps half after TAC, iOS would generate about 2% of Google’s net revenue in 2012. We do not expect any material impact to these assumptions if Google Maps were to no longer be the default mapping application on iOS.
There is a possibility that Google will try to take a more aggressive approach in offering maps for the iOS platform. At a recent press briefing, Google confirmed that enhanced maps will come to the iOS platform in the form of an app.
As the competition between Apple and Google increases, consumers will be the ones that will end up benefitting as they will get to use better technology as a result. Let us wait and watch what happens.