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Apple's services revenue trajectory more uncertain than ever

  • During a 2025 U.S. Antitrust trial, Eddy Cue, Apple's executive overseeing services, disclosed that the company is considering adding an AI-driven search engine to Safari.
  • This move follows a decline in Google searches on Apple devices amid regulatory actions against Alphabet and growing user interest in conversational AI alternatives.
  • Cue indicated Safari may replace Google with AI services from OpenAI, Anthropic, and Perplexity as user behavior shifts towards conversational interfaces over traditional search.
  • Apple earns about $20 billion annually from Google’s search deal, yet Cue said losing it causes him "sleepless nights," while Morgan Stanley flags risks to services revenue growth.
  • The situation signals uncertainty for Apple’s services revenue, depending on retaining Google or successfully monetizing AI search amid evolving search market dynamics.
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ResearchBuzz: Firehose | Individual posts from ResearchBuzz broke the news in on Saturday, May 10, 2025.
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