Google’s 2012 revenue? Two percent will come from iOS

Look, we already know Apple’s iOS platform made Google four times the revenue of Android by end of 2011, courtesy of huge traffic coming from iOS device owners using preloaded search and mapping services from Google.

And as Apple is said to reduce its dependency on the search giant with a rumored in-house mapping service, Google’s bottom line is becoming increasingly tied to the successes of Apple’s iPhone, iPod touch and iPad.

Google’s mobile advertising revenue? That’s nearly all Apple. Looking at the big picture, the search Goliath will get up to two percent of its total revenue for the calendar year 2012 from the iOS platform…

Philip Elmer-DeWitt over at Fortune relays a note to clients by Piper Jaffray analyst Gene Munster.

Here’s your excerpt:

Munster estimates that Google will generate about $4.5 billion in gross mobile revenue in 2012, the lion’s share ($4 billion) from search ads and the rest ($500 million) from display.

He believes that iOS is likely to remain the biggest or close to the biggest source of that revenue, generating roughly 40 percent of the total (or $1.6 billion).

Assuming Google keeps half (after subtracting so-called acquisition costs), iOS would generate about 2 percent of Google’s total revenue in 2012.

Now, if I were Google, I’d be making sure to turn that two percent into four percent and then six or eight percent rather than withhold features on iOS, such as turn-by-turn navigation.

iOS brings home the bacon, developers know it and Google knows it.

Another evidence that Android is peaking: according to a Consumer Intelligence Research Partners survey, some 38 percent of iPhone sales are to refugees from Android or Research In Motion.

That’s a lot of dissatisfied owners of Android devices and BlackBerrys jumping the ship.

Court documents related to Google’s settlement offer to Oracle show that between the end of 2008 through to the end of 2011 Android earned Google $543 million in revenue, while during the same period iOS raked in four times more in advertising revenues.

In the first five months of 2012, on every dollar made from sales of iOS apps developers made 24-cents on Android, according to advertising and analytics company Flurry.

I also found this in a recent Wall Street Journal story about Apple’s own mapping service.

The use of Google search on the iPhone is believed by several mobile industry analysts to generate the majority of Google’s mobile search-ad revenue.

And what happens when Apple supplants a Google Maps backend with its own tiles?

According to former Google employees quoted in the Journal article:

In the short term, Google will lose some ad revenue and miss out on data about what local businesses people are searching for—which it uses to pitch retailers on buying certain ads. Longer term, it is likely to hurt Google’s ability to generate map-related revenue.

Note that Google Maps is used by more than 90 percent of iPhone users in the United States. As for search traffic, last September former FTC official (now a Google employee) Susan Creighton testified under oath that two-thirds of mobile search queries came from iOS devices.

That’s crazy.

The iPhone has about 25 percent share in smartphones and Android’s is two times greater so you’d expect Google’s platform would attract the most search queries.

In my opinion, Google and its then CEO Eric Schmidt (who sat on Apple’s board at the time) should have found a way of entering the smartphone market without blindsiding Jobs.

So Apple struck back and is now waging war against Google on many fronts and multiple dimensions.

It’s epic and unfolding before our own eyes.

Something to tell your grandchildren about, huh?