Apple (NASDAQ:AAPL) may be planning to make Baidu (NASDAQ:BIDU) the default search engine for its iOS devices in China, a move which could further increase Baidu’s share of the Chinese mobile search market.   Google (NASDAQ:GOOG) is currently the default search engine on Apple’s devices globally, but it doesn’t really make sense in China where Baidu dominates the online search market, with more than 80% market share. Baidu competes primarily with Google in search and other Chinese Internet giants like Tencent, Sina, NetEase and Sohu.
While it still leads the global search space, Google’s attempts to operate in China have been hobbled by censorship attempts by the Chinese government. Google is virtually unusable in China after it exit the country, shut down Google.cn, and started redirecting its users to Google.com.hk, its Hongkong based operation, through which it offers uncensored search results.
Given Apple’s recent focus on the booming Chinese smartphone market, Baidu could see a lot of search traffic from iOS devices in China, which would help it increase its market share and boost its search advertising revenue and accounts for more than 60% of its value. It’s not clear whether Apple will add Baidu as a search option or make it the default search option, but the latter seems increasingly likely.
We currently have a $144 Trefis price estimate for Baidu, which stands slightly below its market price.Notes:
- Baidu: Thank You, Google, SeekingAlpha [↩]
- Apple Adding Baidu as iOS Search Engine Option in China?, MacRumors [↩]