Why Apple, Samsung and Google Need Each Other

Summary

This video dives into the surprising relationships between major tech companies like Apple, Samsung, Google, and others. Despite fierce competition, Apple relies on Samsung for high-end OLED displays, generating millions in revenue for the latter. Similarly, Apple and Google’s partnership for Safari's default search engine results in billions for Apple. The video also touches on the intriguing collaboration between Google and Samsung, highlighting their mutual dependence despite Google’s own Pixel phone lineup. These behind-the-scenes partnerships reveal how money and strategic alignments often outweigh public rivalries in the tech industry.

Takeaways

• 😀 Apple and Samsung have a complicated relationship, as they are rivals but also dependent on each other due to Samsung's role as a key supplier of iPhone displays.
• 😀 Samsung has been supplying Apple with high-quality OLED displays for years, making it a major player in Apple's supply chain despite the two companies being direct competitors.
• 😀 Samsung's business is significantly boosted by selling OLED displays to Apple, with the iPhone X alone generating more revenue for Samsung than their own Galaxy S8.
• 😀 If Apple were to switch to a different display technology like micro LED, it would pose a significant challenge to Samsung's display business.
• 😀 Apple and Google have a mutually beneficial relationship, where Google pays Apple $20 billion annually to remain the default search engine in Safari on iPhones.
• 😀 The huge financial arrangement between Apple and Google demonstrates the power of default settings and how it shapes user behavior on Apple's devices.
• 😀 If the $20 billion deal between Apple and Google were to end, it could potentially lead to changes in how search engines are featured on iPhones, with possibilities ranging from ChatGPT or even Apple's own search engine taking the place of Google.
• 😀 The U.S. Justice Department is investigating whether the deal between Apple and Google is anti-competitive, as it contributes significantly to both companies' profits.
• 😀 Despite ongoing rivalry, Google and Samsung have a strong partnership, with Google using Samsung devices to demonstrate Android features in official events.
• 😀 Google and Samsung's collaboration helps distribute Android services and features to a broader audience, with Samsung serving as the primary vehicle for Google’s services globally, especially in markets outside North America.

Q & A

How does Samsung benefit from supplying displays for the iPhone, despite being a direct competitor to Apple?

Samsung benefits from supplying OLED displays for the iPhone because it makes significant revenue from these sales. The economic value of these transactions far outweighs any potential increase in market share that might come from sabotaging Apple's displays. The partnership is profitable for Samsung, even though they are competitors in the smartphone market.

Why doesn't Samsung sabotage Apple's supply of displays, despite the opportunity to hurt their competitor?

Samsung doesn't sabotage Apple's supply of displays because doing so would jeopardize their lucrative contract with Apple. Losing Apple as a customer would result in a significant revenue loss that far exceeds any potential gain from capturing more smartphone market share.

What was a surprising fact about Samsung's profits during the release of the iPhone X?

During the release of the iPhone X, Samsung made more money from selling OLED panels to Apple than from its own Galaxy S8 smartphone, highlighting the enormous scale of display sales Samsung had with Apple.

What could happen if Apple switched to a new type of display, like micro LED?

If Apple switched to micro LED displays, it could pose a threat to Samsung, as they currently hold a dominant position as a supplier of high-end OLED displays. This would force Apple to find new suppliers, potentially impacting Samsung's revenue.

What role does the default search engine in Safari play in Apple's partnership with Google?

The default search engine in Safari plays a critical role in Apple's partnership with Google. By keeping Google as the default search engine, Apple receives $20 billion annually, and Google secures its position as the dominant search engine for millions of iPhone users.

Why does Google pay Apple $20 billion to remain the default search engine in Safari?

Google pays Apple $20 billion to remain the default search engine in Safari because being the default search engine on millions of iPhones guarantees Google a vast user base, which generates substantial revenue from search ads.

What could happen if Apple decided to remove Google as the default search engine?

If Apple decided to remove Google as the default search engine, there are several potential outcomes: Google might still remain the default anyway due to user habits, Apple could switch to a new search engine like ChatGPT, or Apple might introduce its own search engine, which could disrupt Google’s dominance.

What would be the potential impact on Google's business if Apple created its own search engine?

If Apple created its own search engine, it could capture a significant portion of Google's search business, as searches from Apple devices account for over half of Google's search revenue. This could lead to a major loss of revenue for Google.

How does the relationship between Google and Samsung benefit both companies?

The relationship between Google and Samsung benefits both companies because Google relies on Samsung’s devices to distribute Android and Google services globally, while Samsung benefits from Google’s Android system and services, which power their smartphones. They are interdependent in terms of market reach and service integration.

Why does Google sometimes use Samsung devices for showcasing new Android features, even though they have their own Pixel phones?

Google uses Samsung devices to showcase new Android features because Samsung has a much larger market share than Pixel phones, particularly in North America. This helps Google demonstrate the reach of Android features to a broader audience, even though they have their own Pixel lineup.