In a research note this morning, Macquarie analyst Ben Schacter predicted that Google will soon release a version of the Chrome browser for iOS, citing statements by a Google spokesperson.Google’s goal is to lower its traffic acquisition costs for mobile searches.
Right now, Macquarie guesses that Google pays out 50% to 60% of revenue from search ads delivered when mobile users conduct searches via Safari. With Chrome, it would pay nothing.That would help Google counter its recent decline in cost-per-click (CPC), which is partly a result of greater mobile usage.
However, while Chrome on iOS may lower Google’s costs, it is unlikely to have a major effect on the mobile ad market, or Google’s share of that market.
- Smartphone users spend most of their time using apps, and Chrome won’t change that overnight. According to ComScore, users spend about 81.5% of their time using apps, and only 18.9% of their time using a web browser (chart 1). Google’s share is about the same: 81.1% of its mobile audience comes through apps, and only 19.9% through the web (chart 2). So even if Chrome gets to around 20% installed base on iOS (as it is on personal computers), that’s unlikely to change usage habits in the short term.
- Apple will likely limit integration. Chrome will likely be less integrated with iOS than Safari — for instance, Apple will probably not allow it to be the default browser for opening links within built-in apps like Mail and Maps, and perhaps not even for third-party apps like Twitter. So even if iOS users install Chrome, Safari will still be the predominant browser for many users.
- Google is already the default search provider on iOS. Google already has 91% share of mobile searches, according to StatCounter, because of its position as the default search engine on iOS Safari and in most Android phones. Putting Chrome out on iOS won’t improve this market share — although it could mitigate the risk of Apple moving to Microsoft’s Bing as its default search provider.
Long-term, Chrome on iOS could encourage developers to build more Web-based apps for smartphones. With Chrome available on all major computing platforms — Windows, Mac OS, Android, and iOS — developers could write a single Web app and have it run on all four platforms with little extra work.
Eventually, then, sophisticated Web apps running in Chrome might replace native smartphone apps for some percentage of users. In that scenario, Google might be able to drive more smartphone users to do mobile web searches more often than today, which could move more ad spend toward mobile search and away from competitors.
But that won’t happen for several years, if at all.
Side note: Cross-platform interactive apps is the big promise of HTML5. But “HTML5” is actually a group of technologies, and each browser supports different sub-parts of it in different ways. This fragmentation is likely to get more apparent as all the HTML5 proponents seek competitive advantage by introducing and supporting proprietary extensions. For more, read our special report on HTML5, where we argue that HTML5 will replace native apps but later than many think.
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