3 ms·
It is when it's already a sunk cost that would've already been invested even without the search deal, resulting in the incremental cost to add a Google default
by mythz 6y ago
It is when it's already a sunk cost that would've already been invested even without the search deal, resulting in the incremental cost to add a Google default next to zero.
There's no reason for this recurring payment to be compared against revenue when it's essentially pure-profit contribution that cost Apple close to 0 marginal cost to implement.
- lotsofpulp 6y agoAs tptacek pointed out, it did not cost Apple close to 0 marginal cost to implement. Apple spent a lot and continues to spend a lot to retain its enormous share of wealthy users, which is why Google pays as much as it does to be default. Exactly how much to attribute is probably impossible to calculate, but certainly not close enough to zero to call it pure profit.
- simonh 6y agoIt cost Mozilla 0 marginal costs to make google their default search engine, yet it was their primary source of revenue and funded their organisation almost entirely for many years. That certainly didn't make all their google search bar revenue profit. Also as Apple sell more devices they can and do charge Google more, so making better phones and marketing them well, both of which incur costs, earns more search bar revenue. That's direct causal line between costs and that revenue. The fact they also have other revenue doesn't change that. Whole companies have failed because the owners bought that fallacy and fundamentally misunderstood how their own business worked.