Subba’s Serendipitous moments

August 4, 2009

Google and Apple are now confirmed rivals

If there was any doubt about the relationship between Google and Apple, the abrupt resignation of Eric Schmidt — Google CEO from the Apple Board should lay it to rest.

I wonder whether the FCC’s investigation of Apple yanking out Google Voice has something to do it. I wrote about their possible rivalry here, but before I could even conceive of possible actions, the resignation was announced. Coming to think of it, Google and Apple are bracing to compete with each other. Google’s Android which will soon be adopted by many device vendors will be in direct competition with Apple’s iPhone. And the Chrome OS will be competing with the Mac OSX.

But is this new? These moves have been going on for the past few years and while the conflict of interest wasn’t that sharp the yanking of Google Voice seems to have brought all that into the open.

I admire both companies. Both Steve and Eric are respected Valley veterans. They have been role models for me. Nonetheless I have to say they always had antithetical approaches to shaping the future of the consumer experience. Some day there was bound to be a conflict.

Apple believes in creating cool products, but being a walled garden. It has fans, not customers. Even though the iPhone is supposed to be open, every application must be approved by Apple. I had talked about the walled garden approach here and it seems to have worked very well for Apple.

Google has adherents. It believed in openness and its whole purpose (even for its Chrome OS) was to reduce the significance of devices in favor of applications that will reside in the cloud. And once the cloud becomes the organizing system, the devices — be it the phones or the laptops do not matter.

Google crowdsourced its innovation. Apple built an innovation value chain in-house. Both models were successful. Yet I think at the core there is a deep philosophical conflict which manifests as a fight between the open and proprietary approaches.  I wrote about it in the mobile phone industry here and hence am not surprised that a rivalry has come about.

The Google Voice episode is just the beginning. The FCC enquiry may reveal more.

And if the Google-Microsoft war and the Apple-Microsoft war, wasn’t interesting enough, we will see a third war — the Google-Apple war.


  1. Thanks for the post.

    Apple are stymieing competition and innovation and it’s leading to an increasing dissensus among the Apple community. The fact that Google’s revolutionary voice app has been removed from the app store is a complete outrage. It’s no wonder more and more people are “jailbreaking” their iPhones.

    Comment by Kevin Neadley — August 4, 2009 @ 9:38 pm | Reply

    • Hi..!

      Actually I share the outrage. I am wondering whether Apple has a contractual obligation with AT&T which precludes them from removing such application. Hence my earlier post on who’s Google’s rival — Is it AT&T or Apple?

      Comment by Subbaraman Iyer — August 4, 2009 @ 10:08 pm | Reply

  2. Subba,

    Interesting post and comments. I actually was not too surprised by the split between Apple and Google. I see it more of a new philosophy challenging an old one. Not to make generational generalizations, but the guys that started Apple grew up in the early days of computing, and lived through the PC revolution and learned that the best way to keep your customer was to tie them to you through software (a lesson that Microsoft and Oracle also learned). Contrast that with the guys that started Google. They pretty much grew up with computers and are more digital natives than digital immigrants. Their thinking (and philosophy) are very different. They are more used to an “open” or crowdsourced model. Because inexpensive computer based communication and interaction has been available to them most of their life, they tend to think that way, where as Jobs, like Gates or Ellison are more focused on a proprietary model. I think this was a clash of philosophies on the Apple board. I am not saying one is right and the other wrong.

    I too was angry about Apple removing Google Voice on the iPhone, however, I am not sure it really was Apple doing this and not AT&T who’s cellular network is already overwhelmed by iPhone users. I believe this just adds fuel to the fire between AT&T and Apple, and believe that split will also come soon (by Q1 2010). Why is there a Skype application on the iPhone? It challenges both AT&T and Apple? There is probably more here than meets the eye.


    Comment by David Coleman — August 5, 2009 @ 3:25 am | Reply

  3. From Google & Yahoo rivalry in ad-supported free soft ware market (including productivity applications like Gmail, Writely and spreadsheets moved to free software market with competing e-mail, instant messaging, blogging and mapping services. Now, we see Mr. Schmidt’s resignation from Apple is setting up a new scenario, with Apple and Google are on a competitive collision course for sure. It is also interesting fact that both have been effectively sharing two board members. It is also to be noted that his departure is within days of Google announcing that it is developing a PC operating system based on it’s own “Chrome” browser. Hence, I feel it is in competition heating up with Apple, AT&T and Microsoft as well. Apple’s decision to reject Google Voice apps for the iPhone indicates possible relationship management of AT&T. The US government agency is already on the job to find out the facts. I also read an article that AT&T indicated that it was aware of the implications but directly denied involvement in the App Store Approval process. All of us are aware AT&T in the past has acknowledged that it does not want voice over IP apps like Skype or TV-to-phone streaming apps.


    Comment by C.N.Naryana — August 5, 2009 @ 2:22 pm | Reply

  4. Subba,

    Nice post. But then the last lines give me a possibility of a tie up between google and apple to take on Microsoft. I predict that one of these may happen and Microsoft, smart as it is to the marketplace may tie up with either apple or google to take on and try to maintain its turf. The possible candidate for Microsoft would be Apple and then we should see an Microsoft – Apple tie-up to take on Google. Can Google out-smart Microsoft on this ? Eric’s resignation does not seem to be a smart move as he then has restricted his sphere of influence on Apple. Watch the space for my prediction to come true !!!!

    Comment by Nikhil Gujar — August 5, 2009 @ 3:05 pm | Reply

  5. I think now the discussion is pretty interesting thanks to David, subba and Nikhil but all the moves by the top people are always with planning (though it may look abrupt sometimes) especially organizations like Google, Apple and AT&T. Let’s see some more reactions on the topic.


    Comment by C.N.Naryana — August 5, 2009 @ 5:00 pm | Reply

  6. Many similar episodes to be expected in the future. Economic profits exist because of inefficiencies in the value chain (e.g., closed system, monopoly, oligopoly etc.). Incumbents’ strategy is to maintain the status quo for as long as possible and reap the profits. Google is identifying these inefficiencies across many service segments and attempting to tear them down. Openness and near-frictionless marketplace allows Google to better push its advertisement-driven model. Also, it may also be hoping for a redistribution of the economic profits by reconfiguring the value chain. I think this pulls together Google’s seemingly random forays into various market segments — not so senseless after all. Yesterday, it was Microsoft, Nokia/Symbian,… today it is Apple,… tomorrow it will be someone else’s turn on Google’s crosshairs.

    Comment by Foong — August 7, 2009 @ 1:27 pm | Reply

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