Apple vs. Google Is the Most Important Battle in Tech

In the 1990s, Microsoft Internet Explorer battled Netscape Navigator in the great Web-browser wars. In the 2000s, Google and Yahoo locked horns over Internet search — and we know how that turned out. Today, the latest high-stakes tech conflict is between Apple’s iPhone and Google’s Android mobile operating system for supremacy in the smart-phone market.

Each of these clashes defined an era of Internet history. Apple vs. Android is no different. Everyone agrees that the struggle for Internet advantage is shifting to the mobile realm, and iPhone and Android have surged to the front of the pack with diametrically opposed business models. Neither of these players will be vanquished anytime soon — these battles take years to play out — but the company that gains the upper hand will be best positioned to take advantage of the massive structural shift from desktop PCs to smart phones and tablets.

Apple and Google realize how huge the stakes are in this fight. Apple’s late CEO, Steve Jobs, revolutionized the mobile-phone market with the iPhone, and he was furious when Google launched Android because he was convinced it ripped off features from the iPhone. (In August, a San Jose, Calif., federal jury agreed.) Google, meanwhile, has poured millions of dollars into developing Android and billions more bolstering its intellectual-property position by buying Motorola Mobility for $12.5 billion.

This smart-phone showdown is important because Apple and Google are advancing radically different business models to the fight. This is bigger than just a commercial clash between two tech titans. It’s a war between two fundamentally different visions for the future of computing, described in simplistic terms as closed vs. open. Apple’s model is end-to-end control over the iPhone process, from hardware to software to the mobile applications that it must approve for sale in the App Store. Google’s model has been to distribute the Android system for free to the developer community at large and let a thousand flowers bloom.

Each company has been successful with its respective strategy: Apple makes $1 billion per month on iPhone sales, and the device is considered the gold standard for smart-phone design. Android, meanwhile, generates vastly less revenue per unit sold but has racked up massive market-share gains, growing to lead the global mobile OS space in just five years.

Speaking at an event in New York City earlier this week, Google executive chairman Eric Schmidt did not mince words describing the intensity of the showdown and what he characterized as its benefits to consumers. “The Android-Apple platform fight is the defining fight in the industry today,” Schmidt said at an event hosted by AllThingsD co-executive editors Kara Swisher and Walt Mossberg. “We’ve not seen platform fights at this scale,” he added, in comments cited by AllThingsD’s Liz Gannes. “The beneficiary is you guys [consumers]. Prices are dropping rapidly. That’s a wonderful value proposition.”

This battle may have “wonderful” consequences for consumers, but it hasn’t exactly been pleasant for the combatants. In addition to cutthroat competition in the marketplace, Apple has been slugging it out in courtrooms around the world over intellectual property with Google’s hardware partners. Apple’s global patent offensive against Samsung, HTC and other Google partners (including the search giant’s newly acquired Motorola Mobility division) is really a proxy fight against Android. In August, South Korea–based Samsung was hit with a $1.05 billion verdict after a federal jury concluded that it had infringed Apple’s iPhone patents.

To hear them tell it, top executives at both Apple and Google insist they would prefer not to engage in such expensive and drawn-out patent litigation, but at least in Apple’s case, the company feels it has no choice but to defend its flagship product. Last spring, Apple CEO Tim Cook declared that he’s “always hated litigation, and I continue to hate it,” but said it’s his job to protect Apple’s inventions. For his part, Schmidt told the New York audience that “these patent wars are death” and described the patent arms race as “bad for innovation. It eliminates choices.”

That view was backed up in the latest installment of the New York Times iEconomy series, which appeared earlier this week. “The marketplace for new ideas has been corrupted by software patents used as destructive weapons,” the story’s authors wrote, noting that last year, for the first time, Apple and Google spent more on patent litigation and intellectual property than on research and development, a striking fact that sharply illustrates how incentives have become skewed in the tech industry. Elsewhere in the article, a former Apple executive confirmed that in the case of the company’s 2010 lawsuit against HTC, a key Android partner, “Google was the enemy, the real target.”

Could Apple and Google finally be growing weary of the patent wars? There are the faintest glimmers of hope. Google CEO Larry Page and Apple’s Cook have been holding back-channel discussions “about a range of intellectual-property matters, including the ongoing mobile patent disputes between the companies,” Reuters reported six weeks ago. It’s encouraging to see these two tech titans talking, because consumers want to see these firms compete in the marketplace, not bicker in courtrooms. As the battle for smart-phone supremacy rages between Apple and Google, may the best products win — not the company with the best patent lawyers.

Google Chairman Eric Schmidt Raps Apple on iPhone Maps, Floats Yahoo! Search Pact

Google’s executive chairman Eric Schmidt was in Tokyo Tuesday, and he used the occasion to express his frustration with Apple’s decision to yank Google Maps off the new iPhone 5. That move prompted a minor furor in the tech world, because Apple’s map application is inferior to Google Maps, which is generally viewed as the gold standard for mass-market mobile mapping products. Schmidt, who served on Apple’s board of directors until 2009, when Steve Jobs kicked him off over the obvious Android conflict-of-interest, asserted that Google would like to remain partners with Apple on a variety of mobile fronts, including web search, but acknowledged that the ball remains in Apple’s court. Schmidt also made some eyebrow-raising remarks about the possibility that Google, the undisputed web search leader, might link up with its erstwhile competitor Yahoo!, which is now run by a well-respected Google alumna.

The iPhone 5 maps dustup is just the latest front in an epic battle between Google and Apple for supremacy in the mobile computing market. Apple’s late co-founder Steve Jobs went utterly ballistic when Google launched its Android mobile operating system. He was convinced that Android was ripping off Apple’s iPhone features. So he kicked Schmidt off the board, launching an increasingly bitter rivalry between the two tech giants that continues to this day. Apple’s worldwide intellectual property (patent) campaign against Samsung, HTC, and other Google partners (including the search giant’s newly acquired Motorola Mobility division) is really a proxy fight against Android, which Tim Cook continues to wage on behalf of his departed mentor.

Apple and Google’s mobile models are diametrically opposed. Apple has succeeded with end-to-end control over the iPhone process, from hardware to software to mobile apps. Google’s model is to unleash the Android system for free to the hardware and developer community at large, in order to leverage the power of developers and builders worldwide. The result is that Apple makes vastly more money on each iPhone it sells, while Android has chalked up astonishing market-share gains, growing to lead the global mobile OS market in just 5 years.

Apple’s decision to yank Google Maps off the new iPhone is a classic Apple maneuver — using its market power to favor its own products. Unfortunately, in this case, Apple’s map product is inferior to Google’s, which has caused significant agita in the tech community. Speaking to reporters in Tokyo Tuesday, Schmidt’s frustration with Apple’s map decision was palpable beneath the surface of his relentlessly wonky demeanor.

“We think it would have been better if they had kept ours. But what do I know?” Schmidt told reporters in comments cited by Reuters. “What were we going to do, force them not to change their mind? It’s their call.” Indeed it is. This map flare-up is a consequence of Apple’s ironclad control of its flagship iPhone product. At the end of the day, Apple CEO Tim Cook is responsible for his own company, but the decision to boot Google Maps off the iPhone 5 in favor of its inferior product has triggered a sour reaction from the tech community, because it comes from a company — Apple — that ostensibly values the user experience above all else.

Schmidt went on to say that Google hopes to remain a partner with Apple on mobile web search, but admitted that he has no control over the Cupertino, Calif.-based tech giant’s decision-making process. “I’m not doing any predictions,” Schmidt told reporters in comments cited by Reuters. “We want them to be our partner. We welcome that. I’m not going to speculate at all what they’re going to do. They can answer that question as they see fit,” he said. Google has somewhat more leverage on this front, because it dominates the web search market. What is Apple going to do? Strike a deal with its mortal enemy Microsoft to make Bing (which powers Yahoo! search) the default iPhone mobile web search provider? I don’t think so.

Schmidt also took a dig at Apple’s mobile strategy, and chastised the tech media for being ”obsessed with Apple’s marketing events and Apple’s branding,” and ignoring Android’s success. He added that his rival’s world-beating publicity machine is ”great for Apple but the numbers are on our side.”

Finally, Schmidt made some rather startling comments about the possibility that Google might link up with its one-time rival Yahoo! on a web search partnership, as picked up by Eric Jackson over at Forbes. This is not going to happen — regulators would never allow it. Jackson, who is a smart tech-watcher (and Yahoo! shareholder), seems to think this is a plausible idea, and he makes a good point. Times have changed: Yahoo! has largely exited the web search market, thanks to its deal with Microsoft. But it’s not going to happen. Google controls 70% of the web search market. The Federal Trade Commission (FTC) will never allow a company with that kind of market power to assume control over the search business of the number three player in the space. (At least I hope not.) But the fact that Schmidt raised the possibility of a Google-Yahoo! pact is a reflection of how quickly the big-tech ecosystem is evolving.

Ultimately, we’re watching an epic war between two tech icons — Apple and Google — over control of the smartphone market. Everyone agrees that the locus of competition in the Internet space is shifting to mobile devices. This is the next great battle in the war for the Web. The recent iPhone maps flap is just one front in this conflict. Intellectual property is another. Competition between these two powerful tech companies has been a huge boon to consumers — innovation in the mobile phone and tablet market is proceeding at break-neck speed. This fight is incremental, global, and increasingly bitter, as Schmidt’s thinly-veiled jabs at Apple illustrate. Both companies are sitting on massive stockpiles of cash, and pouring billions of dollars into research and development. As we head into the fall, the war between Apple and Google is the hottest game in town.

Apple vs. Google is the Most Important Battle in Tech

In the 1990s, Microsoft Internet Explorer battled Netscape Navigator in the great Web browser wars. In the 2000s, Google and Yahoo locked horns over Internet search — and we know how that turned out. Today, the latest high-stakes tech conflict is between Apple’s iPhone and Google’s Android mobile operating system for supremacy in the smart phone market.

Each of these clashes defined an era of Internet history. Apple vs. Android is no different. Everyone agrees that the struggle for Internet advantage is shifting to the mobile realm, and iPhone and Android have surged to the front of the pack with diametrically opposed business models. Neither of these players will be vanquished anytime soon — these battles take years to play out — but the company that gains the upper-hand will be best-positioned to take advantage of the massive structural shift from desktop PCs to smart phones and tablets.

Apple and Google realize how huge the stakes are in this fight. Apple’s late CEO Steve Jobs revolutionized the mobile phone market with the iPhone, and he was furious when Google launched Android, because he was convinced it ripped off features from the iPhone. (In August, a San Jose, Calif. federal jury agreed.) Google, meanwhile, has poured millions of dollars into developing Android, and billions more bolstering its intellectual property position by buying Motorola Mobility for $12.5 billion.

This “smartphone showdown” is important because Apple and Google are advancing radically different business models to the fight. This is bigger than just a commercial clash between two tech titans. It’s a war between two fundamentally different visions for the future of computing, described in simplistic terms as “closed” vs. “open.” Apple’s model is end-to-end control over the iPhone process, from hardware to software to the mobile applications that it must approve for sale in the App Store. Google’s model has been to distribute the Android system for free to the developer community at large, and let a thousand flowers bloom.

Each company has been successful with its respective strategy: Apple makes $1 billion per month on iPhone sales, and the device is considered the gold standard for smart phone design. Android, meanwhile, generates vastly less revenue per unit sold, but has racked up massive market-share gains, growing to lead the global mobile OS space in just 5 years.

Speaking at an event in New York City earlier this week, Google executive chairman Eric Schmidt did not mince words describing the intensity of the showdown, and what he characterized as its benefits to consumers. “The Android-Apple platform fight is the defining fight in the industry today,” Schmidt said at an event hosted by AllThingsD co-executive editors Kara Swisher and Walt Mossberg. “We’ve not seen platform fights at this scale,” he added, in comments cited by AllThingsD‘s Liz Gannes. “The beneficiary is you guys (i.e., consumers). Prices are dropping rapidly. That’s a wonderful value proposition.”

This battle may have “wonderful” consequences for consumers, but it hasn’t exactly been pleasant for the combatants. In addition to cutthroat competition in the marketplace, Apple has been slugging it out in courtrooms around the world over intellectual property with Google’s hardware partners. Apple’s global patent offensive against Samsung, HTC, and other Google partners (including the search giant’s newly acquired Motorola Mobility division) is really a proxy fight against Android. In August, South Korea-based Samsung was hit with a $1.05 billion verdict after a federal jury concluded that it had infringed Apple’s iPhone patents.

To hear them tell it, top executives at both Apple and Google insist they would prefer not to engage in such expensive and drawn-out patent litigation, but at least in Apple’s case, the company feels it has no choice but to defend its flagship product. Last spring, Apple CEO Tim Cook declared that he’s “always hated litigation, and I continue to hate it,” but said that it’s his job to protect Apple’s inventions. For his part, Schmidt told the New York audience that, “These patent wars are death,” and described the patent arms race as “bad for innovation. It eliminates choices.”

That view was backed up in the latest installment of The New York Times iEconomy series, which appeared earlier this week. “The marketplace for new ideas has been corrupted by software patents used as destructive weapons,” the story’s authors wrote, noting that last year, for the first time, Apple and Google spent more on patent litigation and intellectual property than on research and development, a striking fact that sharply illustrates how incentives have become skewed in the tech industry. Elsewhere in the article, a former Apple executive confirmed that in the case of the company’s 2010 lawsuit against HTC, a key Android partner, “Google was the enemy, the real target.”

Could Apple and Google finally be growing weary of the patent wars? There are the faintest glimmers of hope. Google CEO Larry Page and Apple’s Cook have been holding back-channel discussions “about a range of intellectual property matters, including the ongoing mobile patent disputes between the companies,” Reuters reported six weeks ago. It’s encouraging to see these two tech titans talking, because consumers want to see these firms compete in the marketplace, not bicker in courtrooms. As the battle for smartphone supremacy rages between Apple and Google, may the best products win — not the company with the best patent lawyers.