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Google and Apple Go to War

Posted Sep 08, 2009 09:40am EDT by Dan Frommer in Computers, Electronics, Internet, Media, Networking and Communication, Products and Trends, Mobile

From The Business Insider, Sept. 8, 2009:

Google and Apple are on a collision course.

While the companies are not each others' biggest rivals, they are increasingly competing with each other.

This follows years of enjoying one of the coziest relationships in Silicon Valley -- one that will now get more complicated as the companies compete in more areas.

The latest: Google is developing a movie rental service for YouTube. This is a logical extension of the Web's top video site, as YouTube increases its focus on professional content. But if it happens, it will put YouTube in square competition with Apple's iTunes store, which has offered movie rentals for years.

Video rentals do not generate a huge amount of revenue for either company, so it's not a big conflict. But Google is also increasingly competing with Apple in its more important, core platform businesses.

Their most significant rivalry today is mobile phone platforms, where Google's Android phones compete with Apple's iPhones. So far, Apple has had more success, both in getting consumers to buy its phones, and in getting software companies to develop apps for its platform.

But Google has a big year ahead: It will eventually be distributed by all four major U.S. wireless carriers, while Apple is exclusive with AT&T (for now, at least). And phone manufacturers like Motorola have plans to make lots of mid-range, high-volume phones with Android. Assuming the efforts are adequate, Google could catch up significantly in the next year.

Google is also developing an operating system for computers, which is, of course, one of Apple's biggest businesses. (The Mac generated more than one third of Apple's non-GAAP, adjusted sales last quarter.) Google's Chrome OS is supposed to ship next year, initially on "netbook" portable computers, a market Apple doesn't yet participate in. But eventually, Google plans to offer Chrome OS for laptop and desktop computers, which will inevitably put the companies in deeper competition.

As we said, neither company is each other's biggest rival. Both are probably still most interested in disrupting Microsoft, which is one of the reasons they became so close earlier this decade. Pretty much every area where Google is competing with Apple, it's competing even stronger with Microsoft. But it's impossible for Apple to escape the crossfire.

And that's one big reason that Google chief Eric Schmidt stepped down from Apple's board of directors last month. "Unfortunately, as Google enters more of Apple’s core businesses, with Android and now Chrome OS, Eric’s effectiveness as an Apple Board member will be significantly diminished, since he will have to recuse himself from even larger portions of our meetings due to potential conflicts of interest," Apple CEO Steve Jobs said in a statement.

See more from The Business Insider:

28 Comments

Yahoo! Finance User
Yahoo! Finance User - Tuesday September 08, 2009 09:51AM EDT

who care

TylerS
TylerS - Tuesday September 08, 2009 10:00AM EDT

ROFL ha ha ha ha oh man. "And that's one big reason that Google chief Eric Schmidt stepped down from Apple's board of directors last month." Like, facepalm dude. No wonder Google is competing with Apple.

__A_YAHOO_USER__
__A_YAHOO_USER__ - Tuesday September 08, 2009 10:01AM EDT

hope they both lose the battle and America wins the war.

Lorwynne
Lorwynne - Tuesday September 08, 2009 10:16AM EDT

I think that even though Chrome is a huge competitor for Macintosh, the rest of the world is not yet ready for cloud computing other than simplistic word processing and other basic eSoftware. Google's efforts are commendable, but they are going to have to wait a little longer to topple both Microsoft and Apple with their Internet services.

Yahoo! Finance User
Yahoo! Finance User - Tuesday September 08, 2009 10:17AM EDT

Amen, Finance User! We will NOT allow our country to be taken from us by the corporations (aided by the government).

skeptic
skeptic - Tuesday September 08, 2009 10:25AM EDT

Hey Barbara, what does your rant have to do with the Apple/Google war?

Yahoo! Finance User
Yahoo! Finance User - Tuesday September 08, 2009 10:29AM EDT

It's only a matter of time before Microsoft wakes up and sqashes the two. Microsoft's pockets are very deep.

DavidB
DavidB - Tuesday September 08, 2009 10:30AM EDT

There should be clear labelling when left wing organizations such as the Institute for Policy Studies are represented on TechTicker. There is nothing wrong with interviewing those with left wing views, but having them pose as Wall Street analysts or as institutions with centrist positions does viewers a misservice.

Yahoo! Finance User
Yahoo! Finance User - Tuesday September 08, 2009 10:34AM EDT

Google is the GS of the Internet- a giant vampire squid trying to get hold of every niche with the help of your data and strangle all the competition.

Gary
Gary - Tuesday September 08, 2009 10:36AM EDT

Google would do much better over the long run to stick to its core business model and expand the bredth and scope of search based advertising and services around the globe. Android and Chrome are distractions. Google is falling from greatness.

John
John - Tuesday September 08, 2009 10:45AM EDT

i think we are headed down the road to become a 3rd world nation where the government and big business have all the say. we have to stand up and put a stop to it or we will be going backwards instead of forward

yogi9448
yogi9448 - Tuesday September 08, 2009 10:57AM EDT

Geeks Gone Wild!.....The GOOG chief on AAPL board of directors. Is it just me or was that a Dumb A_s idea from the get go?.....I love my Ipod, but looking through the fog of war it looks like GOOG is catching up with AAPL/MSFT inovation and winning more more battles in AAPL/MSFTs back yard than vice versa. Once GOOG starts providing software with ACER computers, that be another kick in MSFT nads.

Dawgzilla
Dawgzilla - Tuesday September 08, 2009 11:03AM EDT

Both are great companies with great futures! Hopefully, they keep battling, because maybe that makes thier products better and cheaper!////////////////////////On a side bar, because it was post four hundred something on the unemployment blog on today's TT, I thought I'd leave you with this, for whatever it's worth: Sorry people! Historically and hypothetically, unemployment WAS a lagging indicator; that doesn't neccessarily mean it follows the same schematics now. This is a whole different set of headwinds and trials that we now face. Whose to say this isn't the new format in which to learn from as historical data being used. Just like not all past war schemes are the correct ones under today's circumstances (like the gorilla warfare now in Afghanistan and Iraq=bad dudes infiltrate and hide behind "common citizens"=you don't know who is the bad guy from the good)! Let's face it, if we knew that these current U.S./world economic problems were forming, don't you think we could have used PAST historical "facts" and economic ideologies to stop them?! Sometimes NEW historical data is made and created. Just because, normally, most of our old data follows the same old trends doesn't make them follow the "norm" again to a tee! Yes, I do know that history has and does sometimes repeat itself, but that doesn't have to make it so everytime. Our economic theories and schemes are, generally, only a few centuries old. So, those facts and figures and cures for them don't neccessarily mean they can be solved from the same "old mold". We have a world economy now, which means other countries are catching up to us (U.S.) in intelectual capital, manufacturing, wage (albeit, much lowewr than ours=U.S.), etc...The internet and air travel are huge differences from old historical data. We alss have the added Albatross of losing our intellectual and manufacturing jobs overseas due to lower wages paid there. Also, much of those countries benefits are exceedingly lower. It makes us less competitive! That then leaves less jobs and those who still have them with less benefits paid out. The whirlpool effect is less taxes paid into also, leaving the state's and government's coffers less full, actually in more of a deficit! Another problem to cite for not following the unemployment lagging indicator theory is the Baby Boomers=we have less people born after those years, paying in for more benefits=it doesn't add up, no pun intended! The biggest noose around this country's head is the federal deficit, which we wil have a hard enough time paying off the interest alone! States are running such huge deficits that they continue to cut benefits and loyoff people. This has a compounding effect on all aspects of business and industry. People can't go shop, buy houses/new cars without a decent paying job. Those are all STILL being lost, despite whatever the government states about "better than expected" numbers/propoganda! We still have ARMS about to reset and the commercial real estate factor hasn't played out yet too! All of which means more job losses, more people losing their homes, less taxes being taken in by states and the government, less medical benefits paid out, etc., etc..! "Now, you know the rest of the story!"

Triss
Triss - Tuesday September 08, 2009 12:57PM EDT

Why is it these days companies try to take on & win the markets of the world in everything even before they have a sound foundation let alone quality product in 1. What happened to the days when a company started out selling computers or phones or software & stuck to that especially until they had a quality product before trying to expand into other areas especially areas unrelated to where they started.

Yahoo! Finance User
Yahoo! Finance User - Tuesday September 08, 2009 02:42PM EDT

Their most significant rivalry today is mobile phone platforms, where Google's Android phones compete with Apple's iPhones. Ha, that is a laugh! Android isn't competing with iPhone very well. It's like the cub scouts against the marines. And Android is only a RIP OFF of the iPhone, just like Windows is a total rip off of Mac. Apple's products too expensive? I don't think so, unless you just don't know anything about computers. In fact, Dell (I kid you not, the wall mart of computers) actually sells lesser computers for MORE than the Mac book pro. And there are a LOT of people stupid enough to buy them. So far, Apple has had more success, both in getting consumers to buy its phones, and in getting software companies to develop apps for its platform. By several orders of magnitude. Google is insignificant so far. It's only a matter of time before Microsoft wakes up and sqashes the two. Microsoft's pockets are very deep. You've been asleep for a few years? Apple is bigger than Google (by market cap) and getting very close to lame MSFT. A few years ago, softie was 5-6 times as large, now they are not so large (just the biggest monopoly ever invented). MSFT is worth about 220B and Apple is about 155B. MSFT can't program, can't market, and can't ever put Apple out of business. They never could, Apple is the only computer company MSFT didn't simply dispose of, because the products have always been far better (for a LITTLE more money in most cases, but worth every penny and then some).

Yahoo! Finance User
Yahoo! Finance User - Tuesday September 08, 2009 11:10AM EDT

Yahoo! Finance User - Tuesday September 08, 2009 10:17AM EDT Amen, Finance User! We will NOT allow our country to be taken from us by the corporations (aided by the government).************************ I hate to point out the obvious, but you have already allowed your country to be taken from you by corporations aided by your poorly structured government which has now become no more than a corporate brown noser and yes man...

Yahoo! Finance User
Yahoo! Finance User - Tuesday September 08, 2009 06:11PM EDT

The other thing that these phone stores show is how much competition and ambition there is for and by common people. Overnight there were thousands of apps made for the Iphone, and there are quite a few for Android, but at the same time, there seems te be very little competition amongst big companies, in other industries particularily even more so. It seems some people preach capitalism and competition when they want it amongst workers in the US, but they also have all the big money industries and products sewn up. To much competition is anarchy. The American worker could and is trying to pull America out of the recession, but, in my opinion, there is too much competition amongst the American worker to the point where it is driving deflation and wages down, and too little competion in big industry making the US uncompetative.

Yahoo! Finance User
Yahoo! Finance User - Wednesday September 09, 2009 12:17AM EDT

"It's only a matter of time before Microsoft wakes up and sqashes the two. Microsoft's pockets are very deep" funny thing is, aapl has 30 billion cash and no debt and msft has 29 billion and 6 billion in debt. so 'deep pockets' is yet another battle msft has lost to aapl.

Brian
Brian - Wednesday September 09, 2009 01:47PM EDT

All of you must return to your cubicles and await further instructions. Especially all of you Finance Users!

Brian
Brian - Wednesday September 09, 2009 02:12PM EDT

All of you must return to your cubicles and await further instructions. Especially all of you Finance Users!

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