November 24, 2024

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[THE INVESTOR] Samsung Electronics has recently renewed its license payment contract with Google for preinstalling the US firm’s search engine on its smartphones, according to news reports on Aug. 16.

The Korean tech giant receives fees depending on Google’s advertisement earnings from the preinstalled app. JoongAng Ilbo, a local news daily, estimated the amount could reach to some 4 trillion won (US$3.5 billion) this year. 

The estimates seem to be based on its archrival Apple’s licensing revenue from Google. Early this week, Toni Sacconaghi, an analyst of Bernstein Researcher, estimated that Google may be paying Apple as much as US$3 billion to be the default Web browser on its iPhone and iPad this year. That is a threefold increase from US$1 billion in 2014.

“Services have become an increasingly important part of Apple over the last several years,” the analyst wrote, adding that those payments may have made up as much as 25 percent of Apple’s operating profit over the past three years.

JoongAng Ilbo said Samsung has also seen its licensing revenue increase in recent years along with its strong smartphone sales.

Related talks are reportedly led by David Eun, president of Samsung Next, Samsung’s startup accelerator in Silicon Valley, who served as vice president of content partnership at Google.

By Lee Ji-yoon (jylee@heraldcorp.com)