Markets

Google Might Pay Samsung $3.5 Billion in Licensing Fees This Year

An image of a stock chart on a display
Credit: Shutterstock photo

Alphabet's GOOGL Google has renewed its license payment contract with Samsung SSNLF to ensure that the South Korean tech company preinstalls Google's search engine on its smartphones.

Samsung receives fees from Google depending on the company's advertisement earnings from the preinstalled app. According to JoongAng Ilbo , a daily newspaper in South Korea, Samsung could receive fees up to $3.5 billion.

This follows news on Monday that Google will pay Apple AAPL $3 billion this year to remain the default search engine on Apple devices. This payment has increased threefold from the $1 billion Google paid Apple in 2014.

Samsung's licensing revenue has also increased in recent years thanks to its strong smartphone sales.

However, much like its relationship with Apple, Google's large payment to Samsung will most likely pay off in the long run. Remaining the default search engine on both Apple and Samsung smart phones, two of the most popular brands, contributes significantly to Google's mobile search revenue.

Related talks are currently underway and are led by David Eun, president of Samsung Next, Samsung's startup in Silicon Valley, who previously served as vice president of content partnership at Google.

The Hottest Tech Mega-Trend of All

Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaries," but that should still leave plenty of money for regular investors who make the right trades early.

See Zacks' 3 Best Stocks to Play This Trend >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Alphabet Inc. (GOOGL): Free Stock Analysis Report

Apple Inc. (AAPL): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

GOOGL AAPL

Other Topics

Stocks

Latest Markets Videos

    Zacks

    Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

    Learn More