Apple is secretly developing its own search function. Will Google's position be replaced?

In a less noticeable change to the latest version of the iPhone operating system, iOS 14, Apple has begun showing its own search results and linking directly to websites when users type information queries from the home screen.

Several industry insiders said the emergence of this web search feature marks an important development in Apple's internal development and may lay the foundation for a more comprehensive competition with Google Search.

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Apple is notoriously secretive about its internal projects, but the move is further evidence that the company is working on building a competitor to Google's search engine.

Two and a half years ago, Apple poached John Giannandrea, head of Google's search business. The recruitment was ostensibly to enhance Apple's artificial intelligence capabilities and Siri virtual assistant functions, but Giannandrea also brought with him eight years of experience in operating search engines at Google.

Google’s growing in-house search capabilities offer an alternative if U.S. regulators block its partnership with Apple, a move that has gained urgency after the Justice Department filed a lawsuit last week over payments Google made to Apple to be the default search tool on the iPhone.

“Apple has a credible team that I think has the experience and capability to build a general-purpose search engine if they wanted to,” said Bill Coughran, a former Google engineering chief who is now a partner at Silicon Valley investment firm Sequoia Capital.

Illustration: Some search features in iOS 14 have left Google out in the cold

Apple's ambitions are evident in its frequent job ads for search engineers, which invite applicants to "define and implement Apple's groundbreaking search technology architecture."

Search marketing experts also noted an increase in activity from Applebot, the company's once-obscure Web crawler that is used to build the vast databases of online material that underpin any search engine.

Suganthan Mohanadasan, a digital marketing consultant, said Applebot has been showing up on his clients’ websites “incredibly frequently” in recent weeks. “When the crawl rate goes up, it’s a sign that they’re trying to gather more information.”

Most importantly, iOS 14 has pushed Google Search aside for certain search features. In the updated system, users can access the search window by swiping right from the iPhone's home screen to query, a feature Apple calls "Today View." The query results show a list of search suggestions generated by Apple instead of Google search results. These search results include Apple's "autocomplete" style suggestions, indicating that Apple is learning from the most common query behaviors of 1 billion users.

Apple declined to comment.

Building a true competitor to Google's search engine may take years, but with Apple's profits expected to exceed $55 billion this year and cash reserves of $81 billion at last count, it can afford to make a long-term investment in this area.

Yet for more than a decade, Apple has used Google Search as the default search engine on the iPhone.

Now that regulators are forcing Apple to choose between defending its relationship with Google or parting ways with its longtime partner in search, Apple has growing motivation to change that.

The U.S. Justice Department estimates that Google pays Apple between $8 billion and $12 billion a year to be the default search engine on Apple devices such as the iPhone. The agency has made the deal central to its antitrust case against Google.

Sharis Pozen, co-head of the global antitrust practice at Clifford Chance and a former acting assistant attorney general at the U.S. Department of Justice, said the case "opens up another front for Apple" in addition to its legal battles with Epic Games and others over control of the Apple App Store. "Apple will be at the heart of this case," she said, and that Apple must "tread carefully" in explaining why it received billions of dollars in funding from Google.

She said the Justice Department would likely seek to end the exclusive agreement to allow other players in the search space an equal opportunity to gain default search engine status on the iPhone.

Apple has stumbled before in its battle with Google. When Apple Maps first launched in 2012, it was so buggy that Scott Forstall, one of co-founder Steve Jobs’ top lieutenants, was forced to resign.

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Neeva co-founder and former Google advertising chief Sridhar Ramaswamy thinks it's natural for Apple to develop a search engine

But Apple is one of the few companies with the resources to build an index of the web from scratch. Most of Google’s smaller rivals get their index from Microsoft Corp.’s Bing search engine, including privacy-focused DuckDuckGo and Neeva, a Silicon Valley startup founded by two former Google executives.

“Apple is in a very unique position because it owns the iPhone and iOS. It controls the default browser,” said Sridhar Ramaswamy, co-founder of Neeva and a former advertising executive at Google. He said expanding search “feels natural” for Apple because of its ability to collect data and learn from user behavior at scale.

More than 20 years after Google was founded, building a search engine today is "still technically very difficult, but not as difficult as it was," said Coughlan, the Neeva investor who invested $35 million in the company, thanks in part to cheaper cloud computing infrastructure and a host of open source tools available to both Apple and startups like Neeva.

Still, the scale of building a search engine is daunting. “Any viable search engine has to have an active index of 20 billion to 50 billion pages,” Ramaswamy says. When a user asks a query, the retrieval system has to sift through vast amounts of data and then sort the results in milliseconds.

Some industry insiders do not believe that Apple will create a search engine that can compete with Google.

Dan Wang, associate professor of business at Columbia Business School, said it would be "extremely difficult" for Apple to catch up with Google.

"Google's advantage comes from scale," he said, with endless user feedback helping to fine-tune results and identify areas for improvement. "Google receives hundreds of millions of queries every minute from users around the world, which is a huge advantage in terms of data."