Google Accounts for a Huge Amount of Apple's Profits
Every year, Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) pays for the placement of Google as the default search engine in web browsers. It files those payments under "traffic acquisition costs," or TAC, on its income statement. Last year, Alphabet paid nearly $33 billion in TAC, and one company benefited greatly from those payments: Apple (NASDAQ: AAPL).
Apple collected around $10 billion in TAC payments last year, according to estimates from Bernstein analyst Toni Sacconaghi. He expects that number to climb to $15 billion this year, and it could reach $20 billion next year. He estimates Google's payments will account for about 9% of Apple's gross profits in fiscal 2021.
Here are some questions investors should be asking.
Source Fool.com
