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.