Key Point 1:
Apple executives confirm the introduction of AI search options in the Safari browser on iPhone, iPad, and Mac.
Key Point 2:
Key factors prompting this move include a decline in Safari search volume for the first time since the launch of the first-generation iPhone, and the looming threat of termination of the high-priced default search agreement with Google.
Key Point 3:
Apple anticipates that AI search will become the mainstream method for accessing online information, planning to integrate various AI providers into Safari and assess the establishment of a new revenue-sharing model.
Apple Safari to Introduce AI Search
Apple is actively considering the integration of AI (artificial intelligence) search engines into its Safari web browser, a significant potential shift partly influenced by the possible termination of its long-term partnership with Google’s parent company, Alphabet. This news was revealed by Eddy Cue, Apple’s senior vice president of services, during his testimony in a lawsuit against Alphabet by the U.S. Department of Justice. The core of this case revolves around an estimated $20 billion per year agreement, which grants Google the status of the default search engine on Apple devices’ Safari.
Following the announcement, Alphabet’s stock price fell by 7.3% on Wednesday, marking its largest drop since February; Apple’s stock price also declined by 1.1% due to Cue’s comments. In summary, this lawsuit may force these two tech giants to sever their partnership, disrupting the long-standing operational model of devices like the iPhone.
Rise of AI Search! Apple Plans to Integrate Third-Party Providers like ChatGPT and Perplexity
During his testimony, Cue pointed out that AI has become prevalent among users, and for the first time last month, Safari experienced a decline in search volume, which he attributed to users turning to AI services. Cue believes that AI search providers, including OpenAI, Perplexity AI Inc., and Anthropic PBC, will ultimately replace standard search engines like Google under Alphabet Inc.
He mentioned that Apple plans to add these AI options to the list in Safari, but “they may not be the default option,” as he believes they still need improvement. Cue confirmed that the company has had discussions with Perplexity AI. He stated, “Before AI emerged, I didn’t think other options were viable. I believe there is greater potential today because new entrants are solving problems in different ways.”
Cue emphasized that technological changes are rapid; in a few years, people might not be using the same devices. He said, “While it sounds crazy, you might not need an iPhone in ten years.” The only way to truly compete is through technological change, and AI represents a new technological shift that is creating new opportunities for newcomers.
Apple Executive: Shifting to AI Search is Inevitable
Apple currently offers the ChatGPT option from OpenAI in its Siri digital assistant and expects to incorporate Google’s AI search product, Gemini, later this year. Cue noted that Apple has also considered Claude from Anthropic, DeepSeek from China, and Grok from Elon Musk’s xAI.
Cue stated that before ChatGPT was selected as part of Apple Intelligence in iOS 18 last year, there was a “standoff” with Google. He mentioned that the list of terms provided by Google “contained many items that Apple would not agree to, and there was no consensus with OpenAI.”
In other words, before Apple chose to integrate ChatGPT into the Apple Intelligence feature of iOS 18, it had evaluated Google’s proposal. However, the conditions proposed by Google (on the terms list) contained many elements that Apple could not accept, which were also absent in the agreement signed with OpenAI.
Cue believes that AI participants need to improve their search indexing, but even if improvements are slow, they still have many “far better features that will drive people toward them.” He is confident that with sufficient funding and involvement from major players, this shift is inevitable.
If the Google Default Search Engine Agreement Breaks, It May Impact Apple’s Revenue
The trend of shifting from traditional search engines to AI search has significant implications for Apple, which has over 2 billion active devices, including the iPhone. Since the launch of the first iPhone in 2007, users have been conducting online searches through Google.
In the future, consumers may enter a world dominated by AI from multiple companies. The approximately $20 billion annual partnership agreement between Google and Apple has brought substantial revenue to Apple, primarily attributed to its services segment. During his testimony, Cue expressed concern about the revenue-sharing implications of potentially losing this agreement, noting that the current standard search agreement with Google still offers the most favorable financial terms.
Cue oversees services such as iCloud, TV+, and Apple Music, and is also a key dealmaker for the company. Any losses resulting from the collapse of this partnership would be reflected in the financial performance of the departments he oversees.
As hardware sales slow, the services segment has been Apple’s primary revenue driver in recent years, with the segment recording a revenue record of $26.6 billion (approximately NT$808.5 billion) in the quarter ending in March.
This article is a collaborative repost from: Digital Age
Further Reading:
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Source: Bloomberg, 9to5mac
This draft was initially composed by AI, organized and edited by Li Xiantai.