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Is Google playing to lose in this antitrust case?
These seem to be the facts: Google pays Apple $10bn a year to be the default search engine on iPhone. This fee amounts to pure rent-seeking behavior on Apple's part - if Google doesn't pay up, they can go to Microsoft (who, even if they're not willing to match Google's fee, will pay something, for reasons outlined below). Google is the most popular search engine, the great majority of users don't really care what the default search engine is anyway, and it costs Apple nothing in engineering, reputation or other costs to make Google the default. Essentially, Apple makes $10bn for nothing.
Why does Google pay? The iPhone search market is extremely important to Google. iPhone users make up the majority of affluent smartphone users in the world's wealthiest countries, which means that they're far more valuable to advertisers, and therefore Google's most valuable users. iOS also has supermajority marketshare among young people in the crucial 18-35 demographic in the US (and is disproportionately owned by affluent young people around the world), considered by far the most valuable to advertisers.
Losing the iPhone demographic to Bing would amount to cutting out the majority of affluent and/or young consumers in Google's key ad sales markets, a blow far more substantial than their percentage of Google's total userbase would suggest. So Google pays $10bn a year because the alternative is the enemy taking the most valuable customers (or customers of the customers, if you want to be pedantic) of their central product.
But this risk only exists if the alternative to Google is Bing. If the alternative to Google is the search engine equivalent of the browser choice screen that appears when you install Windows (after the antitrust trials of the 2000s), the problem is much reduced. The vast majority of Apple users, when presented with a choice at setup between, say, Google, Bing and DuckDuckGo will pick Google, the same way they currently do on PC (for both browser and search engine). A small number of Apple users might switch, but there's every chance these are worth far less to Google than $10bn a year, which Google pays to avoid Bing being the default, not to avoid a choice in which most people will choose them.
The biggest loser if Google loses the antitrust case isn't Google, it's Apple, who miss out on the $10bn. Even for the world's most profitable company, $10bn in pure margin represents 10% of net income in a good year, so that's no small amount. For Google, by contrast, as long as the great majority of iPhone users pick Google over Bing (and there is every indication that they will), they're freed from a $10bn ransom and don't have to hand over all their top users to Microsoft.
More than half of all smartphones are Apple, in the US. Interesting that the affluent set uses the most popular phone. You'd think there'd be a "rich people phone" that stands out among the plebs.
(Maybe it does, and it's the fanciness of said iPhone, i.e. new and not used, or more memory, that makes the difference.)
Phones are too visually similar. The wealth signalling Apple accessory is the Apple Watch.
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