Could Google Phone Drive Apple into Arms of Microsoft?

Updated Techwriter10 1 Tallied Votes 1K Views Share

In a very interesting read in BusinessWeek last week, writer Peter Burrows describes what he sees as the start of war between Apple and Google with the big prize being the Mobile Ad market.

Burrows further speculates that it's possible this could escalate to the point where Apple will make Bing its default search engine on the iPhone. Hard to know whether this will happen, and if consumers would stand for it, but it certainly could mark a new chapter in the ever-shifting alliances among Google, Apple and Microsoft.

Each Company Has Its Strengths

Google is a search and ad company. As such in any play that involves advertising, Google should have the advantage. But Apple has its App Store and a growing eco system of developers and applications. There are more than 100,000 applications available today in the App Store, a number that dwarfs any similar venture, including the one for Android. It's hard to imagine Google ever catching up in this regard.

Meanwhile, while Google worked with HTC to create what looks like a feature rich phone, it's never going to be able to compete with iPhone. In fact, Flurry reported in a blog post last week Google sold an embarrassing 20,000 Nexus Ones the first week out. Even when you combine the big three Android phone releases this year--the Nexus One, MyTouch and Droid--first week sales only add up to 330,330 units sold the first week.

Compare that with the iPhone 3GS, which sold an astonishing 1.6M units its first week. Apple clearly wins this battle and with the Android market fragmented by its nature, it's clearly not a battle Google can hope to ever win.

Could The War Escalate?

In spite of these obvious strengths and weaknesses, Burrows believes the war could escalate to the point where Apple could make Bing its default search engine. I'm not so sure I agree Apple will take it this far, but if they do, I'm predicting they will get a user a back lash that forces them to provide an easy way to switch back to Google. Still, it's also easy to imagine the situation deteriorating to the point each party begins to make strange moves that are more spiteful than strategic.

Finding Common Ground Makes More Sense

While an Apple-Google war would make great fodder for bloggers like me, it might make more sense to find some common ground and play off each company's strengths in strategic partnerships. Maybe Google works with Apple on the Ad side of the equation and Apple works with App Store developers to build Android and iPhone versions of more popular Apps. The Mobile space is by all reports a very lucrative and growing pie. In all likelihood, there's plenty of room for everyone to fill up.

Working together these companies could be a force. Creating a war will likely end up eating resources, creating bad blood, and possibly strengthening Microsoft, an outcome I'm sure neither company would like.

Justa Notherguy 0 Newbie Poster

Interesting. So, you figure "this could escalate to the point where Google will make Bing its default search engine on the iPhone"? Who knew Google had such power over a competitor's product?

Holy crap, guys - doesn't _anybody_ proofread, anymore? Grammatical and compositional errors (like, say, a tendency toward run-on sentences with recursively intertwined clauses) are bad enough. But it's ludicrous to find that you can't even catch a major transposition of company names.

Salem 5,138 Posting Sage

> first week sales only ad up to 330,330 units sold the first week.
How does that compare to the original iPhone release way back in 2007?
- before the recession hit and people would still buy new toys on spec. Today's purchasers are much more circumspect.
- when there was less competition on the ground to begin with.
Also note that it is 330,000+ NEW customers, and also 330,000+ customers not buying an iPhone.
I suppose the other alternative headline was "Apple loses 20% market share".

> Compare that with the iPhone 3GS, which sold an astonishing 1.6M units its first week.
This is what, the 3rd or 4th model in the series?
So how many are NEW customers and how many are fanboys upgrading to the latest model? Unless it's like 1M+ new customers, Apple could see it's lead erode pretty rapidly.

> But Apple has its App Store and a growing eco system of developers and applications.
Yes, and some quite high barriers to gain entry to play the game (like needing a particular kind of Macintosh, Apple taking a cut along the way and having the final say on what can/cannot be in the store).
Google's approach seems a lot different - any kid with a PC running any OS they like can develop apps.
Having spent the effort to write and debug an application, it will take a lot less time to port it to another platform.

Apple are basically in the same boat that IBM was in during the early 1980's with the PC. As soon as the hardware became a commodity item, they were all but out of the game. Phones are rapidly becoming just mobile connected computers. People won't care about who's badge is on the front, so long as it runs their favourite apps, and can make a passably decent phone call.

Techwriter10 42 Practically a Posting Shark

Thanks for the catches. You're right there were some sloppy errors in this post and I apologize. I write these things myself. We don't have editors. As for the rest, you're entitled to your opinion, but I think the rest reads fine.

Thanks for stopping by.


Techwriter10 42 Practically a Posting Shark

Thanks for the comment, but I don't see the connection between Apple and 1980s IBM as clearly as you do. They have a rabid customer base that loves their products and continues to buy them in large numbers. Phones are already commodity items, but Apple somehow manages to avoid the commodity trap and make large margins on products on the higher end of the price spectrum.

Regarding the App store, the high entry barrier of which you write, doesn't appear to have limited its growth in any way I can see. The App Store is a huge and growing success. You simply can't argue with the numbers.

As for whether the customers are new or old, what does that matter? If Apple can compel a current iPhone owner to upgrade to the newest version, a sale is a sale is a sale. It really doesn't matter.

Thanks for your thoughts.


happygeek 2,411 Most Valuable Poster Team Colleague Featured Poster

Errors corrected

Random Guy 0 Newbie Poster

Well Salem let me correct a couple of things for you..........

330,330 Android (2009) top of the line products (Nexus One, Droid and My Touch) sold in the first week of availability, versus 270,000 iPhone 2G (2007) sold in the first weekend. Hardly sounds like a comparison to me. 3 against 1, and the original iPhone almost sold as many phones in its first weekend (3 days) as all 3 top Android phones sold in its first week (7 days). And correct me if I am wrong but aren't the specs on these 3 phones better than the current 2009 3GS (which dominated in its first weekend sales (we will get to that in a moment))?

Android has been around for a couple of years now, so the excuses are getting old. I always felt that the one advantage that Android had over the iPhone was that it used several companies and came in many different designs (keyboard, touchscreen, both, multiple providers, etc.). What that means is people have options and aren't stuck with what Apple offers (one design and one provider).

With all of this said, Apple still dominates and always have in this smartphone field since they joined summer of 2007.

These are first weekend sales numbers for the iPhone:

2007: 270,000
2008: 1,000,000
2009: 1,600,000 (according to this article)

I agree with Ron, that it doesn't matter whether or not the customers are new or old. If they are new (which in most cases they have been according to AT&T records of adding more new customers than any other provider the last few quarters due to the iPhone) than that is great. If they are old customers, than that is even better in some cases (because that shows that customers do not care if they are breaking their contracts or adding family lines to get the new product every year from Apple). AT&T has been getting bashed for their service but are still bringing in more customers than anyone else. I mean I am not a genius but think about that. Sounds like the iPhone is doing something right and the only reason why Verizon can claim they have more total customers than the evil AT&T is because of their acquisititon of Alltel a little while back. Also keep in mind that Android is currently using 3 of the top 4 providers in the US compared to Apples 1. This Spring Android will add AT&T to that list with the Motorola Backflip.

Also your point about today customers being more cautious about their purchases due to the economy.....have you seen the iPhone sales numbers the last couple of quarters. Can you say record?! 7.4 million phones in one quarter for one piece of hardware where people complain about the provider and lack of keyboard. Analyst are predicting more than 11 million for the last quarter (Christmas qtr) and numbers should be out in a couple of weeks. Give respect where it is due. The iPhone market share continues to grow with one design (ONE). When everyone was saying it would never threaten the Blackberry and so on, it just continued to grow and the blackberry either stop growing and stayed steady or started to show decline. How many Blackberry models are there btw on the market? Another example of it doesn't matter how many phones may have better specs, more hardware options, longer mobile history, and more/better providers the iPhone rules easily.

This October 2010, when the iPhone 4G and the iSlate (tablet) has both been out for at least a quarter, you haters (no disrespect) will finally understand (you probably secretly already do) that Apple products are taking over and there is nothing you can do for the foreseeable future. When the new iPod Touch w/ video joins that lineup this year as well.................

As far as last competition in 2007, well all I can say about that is Blackberry and New Revolutionary product (Touchscreen smartphone). I mean don't people normally show skepticism in those situations?

Also, I do not know how Apple can be gaining record amounts of market shares and losing 20% at the same time as you eluded. Android will always have their numbers. iPhones will just be higher.

Lastly as far as the app stores and developers, yes Android is the easiest to design for and is open sourced, but that is about it. You will find many of articles where not only are more developers choosing Apple, but they are easily making more money (most say that they are not making money on Android) and they do not have to cover so many different codes on Apple like they do with Androids many different platforms (1.4, 1.6, 2.0, 2.1, etc.).

Have a great day!!!!!!!!

Techwriter10 42 Practically a Posting Shark

Random Guy

Thanks for all the great points. Appreciate the comment.


Sothatsit 0 Newbie Poster

The Nexus One had a very low-key launch compared to the Droid and others. It was internet-only and the only people who bought were those paying active attention to cellular tech.

That's a very small group relative to the total population. That they moved 20,000 units in such an situation is a good thing.....nit a sign of failure.

iPhone is an excellent device / system.....except for the iTunes/Apple choke-hold on apps and data. An Android phone can do everything an iPhone can do....and a lot of things the iPhone can't do. Nothing geeky. Just basic stuff like swapping batteries and sdcards or moving files and apps on / off the phone. Just sharing stuff.

iPhone was the very best option out there for most of two years. But it has its own system/ecology limitations that eventually chafe and annoy and leave the phone owner looking for more freedom to do what they want to do.

Sure....many people will be forever happy with what Apple offers....and many won't.

let's not forget the world ran DOS while Apple Mac offered a FAR better system....but DOS would run on a device from a huge variety of vendors and was more open......despite being inferior to Mac OS in almost every way.

The gap between Apple and Android isn't as great as the gap between Apple Mac and DOS.

In the end, people vote for freedom and for cheaper.....and then some other people will always love their Apples.

I love choice. :-)

Techwriter10 42 Practically a Posting Shark

Thanks for commenting, but must disagree with your first point. This was an extremely high profile launch and attended by press, top-name bloggers, analysts and other industry movers and shakers. It was in fact very Apple-like in its approach.

The iPhone was launched at an invitation-only Apple event. I don't see how that's different.

As for the choice points, nobody is suggesting that there should only be one phone. I totally agree that choice is a good thing and there are features on the Nexus One that should push its competitors including Apple and others to innovate. That's all to the good (and something I write about frequently in this blog).

My point in this post was to point out Peter Burrow's argument about a brewing war between these two very powerful companies and to suggest that working together in strategic partnerships might be a better way to go than battling each other.

I think Android is a great platform and I've written I think the Droid is a great phone. By all accounts so is Nexus One.

Thanks for taking the time to comment.


noname63578 0 Newbie Poster

> Compare that with the iPhone 3GS, which sold an astonishing 1.6M units
> its first week. Apple clearly wins this battle and with the Android market
> fragmented by its nature, it's clearly not a battle Google can hope to ever win.

- Yahoo

How many 800-pound gorilla scalps do the google boys have to nail to their walls until the wise guys take them seriously?

Techwriter10 42 Practically a Posting Shark

AOL was dead for all intents and purposes long before Google ever became a force. As for MSN, they were never a factor, certainly not in search. Google beat Yahoo with its core strength, that being search. But again, there is nothing in post that suggest I don't take Google seriously. If you read my body of work, you know that I do. This post is merely suggesting that a war between Google and Apple wouldn't really be a good idea for either company and they would be better off working together in strategic partnerships, rather than fighting each other.

But I do believe it's a bad idea for Google to sell phones especially in their Web-only model. I believe companies do best when they stick to what they do best and Google doesn't know retail. Apple does.

Thanks for your comment.

os2baba 0 Newbie Poster

The Android OS was better than the iPhone OS when it was released with the G1. But the reverse was also true. The iPhone edged out the Android in many areas as well. Android has been out for just a little over a year not two years. In that time, Android has made remarkable progress. Far more than the iPhone in 2.5 years actually. The OS went past the iPhone 6 months ago, but it's only now with the Droid and the Nexus One that the hardware caught up with the OS and now apart from media and games, it leaves the iPhone in the dust - in user experience and compelling killer apps (Oh the irony). I'm sure that Apple which has rested on its laurels for the last 18 months will come up with better this summer, but it has now lost the overpowering edge that it has previously due to its hubris. It made a strategic error in not negotiating with Verizon last summer when it had the upper hand. It's still got a great hand, but it can no longer dictate to Verizon.

Now that the hardware has caught up, I expect Apple to lose market share this year. As you said, a sale is a sale. Whether people upgraded or not - In fact even more impressive if people upgraded from a perfectly fine 3G to a much improved 3GS (note that it improved against the 3G, but not against the Android). The difference is market share. How many new customers did it get. I have no idea. Because if many were upgrades, then the rest are customers it has to fight out with the Android to get.

Member Avatar for pengo

Google is rather a lot more than a search and ad company. Its diverse efforts in the cloud space and on the bleeding edges of technology are garnering significant support from enterprise developers and web entrepreneurs. It is, in fact, easy to imagine Google overtaking Apple.

But imagination is worthless. What's needed are hard statistical facts and an informed analysis of trends. I would have expected to find a little more meat in this article.

::Leigh Harrison

jay 11 8 The Dude Abides Team Colleague

There was a new article posted today about this on BusinessWeek.

Personally, i don't think Apple will drop Google on the iPhone. Although.. to me it seems that if Apple wanted to better compete with Google's new mobile developments, they should drop their exclusivity contract with AT&T.

Be a part of the DaniWeb community

We're a friendly, industry-focused community of developers, IT pros, digital marketers, and technology enthusiasts meeting, networking, learning, and sharing knowledge.