Safari search bar iPhone XSource: iMore

What you need to know

  • Bernstein analyst Toni Sacconaghi has another suggestion for Apple.
  • The analyst believes Apple should acquire DuckDuckGo to compete in search with Google.
  • Last week, Sacconaghi had recommended Apple sell a more health-focused sub-$250 Apple Watch.

Last week, Bernstein analyst Toni Sacconaghi made a bit of a wave in the Apple community by suggesting that Apple sell a sub-$250 Apple Watch, saying that such a move would boost sales by as much as ten-fold. Apple already sells the Apple Watch Series 3 for $199, but Sacconaghi says more health-focused features are required in a device at this price point to accomplish the sales figures he dreamed of.

Today, Sacconaghi is back with another interesting recommendation for the company. Reported by Street Insider, the Bernstein analyst believes that Apple may acquire DuckDuckGo, the popular privacy-focused search engine.

While Google currently pays Apple around $7-8 billion dollars a year to be the default search engine on iOS, Sacconaghi says that Apple could prefer to have its own search engine that it controls. DuckDuckGo would align the most with the company's stance on privacy.

"On the other hand, Apple may consider acquiring its own search engine, to capture the lucrative advertising stream for themselves and/or serve as a "stalking horse" to pressure Google. The analyst believes it could buy the privacy-centric, #4 U.S. search engine, DuckDuckGo for (less than) $1B. This amounts to less than a week's worth of cash flow."

Sacconaghi says that iOS still "remains uncomfortably dependent on Bing to act as a counter weight to Google – hence our suggestion that Apple acquire its own search engine."

"Google is clearly the dominant force in search today. However, we suspect the company's fear of "rocking the boat" – which could compromise $15B in profits it captures today from iOS – may ultimately limit its freedom of action with Apple. Conversely, Apple may be in a stronger position than at first glance, given it controls the keys to the kingdom on who can monetize iOS search. However, it remains uncomfortably dependent on Bing to act as a counter weight to Google – hence our suggestion that Apple acquire its own search engine. Finally, Microsoft Bing may (counterintuitively) have the most "option value" vis-à-vis the status quo – although it remains to be seen how aggressively it will pursue this opportunity."

There have been no recent rumors of Apple being interested in purchasing DuckDuckGo, nor DuckDuckGo interested in selling to Apple. Such an acquisition would, if it ever happened, begin a new era of the search battle.