Apple Presses Ahead With A New Search Engine
Bing! has some nifty and unique features; DuckDuckGo offers privacy; Ecosia plants trees when people use its search engine.
Still, we use Google. It had an 88% share of the global search market in October 2020, Statista tells me.
Crawling, indexing, and then ranking all of the Web, in response to billions of daily queries, is a pretty big job. DuckDuckGo, for example, licences its index from Bing!. Even with the heft of Microsoft behind it, Bing! has had limited success in attracting users.
Huawei, for all its resources and its huge user base, only resorted to building its own search engine when it was banned from using Google. (As we discussed here.)
Apple has been happy to leave search to Google for the last decade, and to receive handsome profits in return.
Google listed “traffic acquisition costs” of $30 billion in 2019, about $12 billion of which went to Apple.
Apple has plenty of cash ($81bn of net cash reserves, at last count), but $12 billion a year for doing very little is still a sweet deal.
So, why is Apple working on its own search engine?
First, the deal to keep Google as the principal search engine on iOS is under increasing scrutiny in the US and the EU. It does look like textbook, anti-competitive behaviour.
Apple needs an alternative to Google, should they lose out in any anti-trust cases. Google’s recent threat to pull out of the Australian market, should it be forced to pay for publishers’ news content, further underlines the precariousness of relying on another company for such a vital service.
Second, Apple is implementing a long-term strategy to bring all aspects of iOS devices under its control. We can see this in the shift away from Intel chips, starting with the Apple-built M1 chip in the new MacBook Air.
The first reason leans in heavily to the second. Yet Apple did hire Google’s head of search two years ago and the iOS 14 update offers search results from Apple via the home screen. These developments suggest Apple was already experimenting with search before the threat of anti-trust enforcement emerged.
Would Apple search be cause for concern at Google?
Trying to beat Google on quality of search results would be misguided. Even if Apple did so, there is no guarantee users would make the switch.
Bing! ran a popular campaign (called Bing It On!) in 2012, as a digital take on the Pepsi Challenge. They asked users to compare Bing! results with Google results and pick their favourites. Bing! fared well in the comparison, but few users jettisoned Google as a result.
Taking Google on in the digital advertising game would also be a misstep. Google excels at matching advertisers to users across its growing range of online platforms. It makes so much money through this model (close to $100bn a year) that its search engine development costs are very easy to justify.
The key for Apple is that, unlike Microsoft, it would not tackle Google head on in this area.
By offering search that does not depend on ad revenues, Apple can build a different experience that is accessed directly from the home screens of its devices. The user’s sensitive data would live on the device, not in the Cloud.
If we put this into the wider context of Apple’s current strategy, we can see that Apple is set to launch a variety of new, fitness-related features. It has taken the lead in developing “nutrition labels” for apps to highlight the impact of products on user health. Apple’s Safari Web browser removed third-party, cookie-based tracking long before Google Chrome considered doing the same.
Apple Maps is an illuminating point of focus, if we want to imagine the future of Apple Search.
It has had many technical issues since its launch as a Google Maps rival, but is still the third most popular mapping app after Google Maps and the Alphabet-owned Waze.
Apple Maps has introduced new features for cycling routes and electric vehicle charging, and Maps will likely tie in to data from Apple’s range of watches. Users can talk to Siri and ask “her” to create a travel plan, too.
Any Apple Search experience will make use of Siri in a way Google has not yet been able to achieve with its own Assistant. Google still needs screens for its results, in order to show all those ads. Apple has the user base and the resources to develop a viable, distinct alternative for the IoT age.
There is a ceiling on the number of users Apple can realistically attract, without lowering costs and diminishing the brand’s allure. Instead, Apple wants to grow its revenues per user, by getting closer to their everyday lives.
That means Apple is not aiming to topple Google as the go-to search engine on all devices. Without the anti-trust threat, Apple would readily continue receiving $12bn a year to pass the responsibility to Google.
Apple Search won’t be better than Google Search, but that is not the only thing that matters.