Friday, April 12, 2024

Why Google and Apple Are Now Enemies

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Apple’s Worldwide Developers Conference keynote Monday made it clear to the world that Apple is escalating its conflict with former ally Google.

Pundits are speculating about how this separation, conflict and polarization of the tech world can be avoided.

It can’t be.

Conflict and enmity between Google and Apple is inevitable.

The reason is that Google and Apple are the Athens and Sparta of the tech industry. It’s in the DNA of both companies to rule the tech world. They will battle each other for supremacy and, in the process, greatly diminish each other’s power and reach. United, they could accomplish anything. But they will not be united. They will become increasingly divided.

It’s a Greek tragedy unfolding before our very eyes.

Athens and Sparta

Broadly speaking, classical Athens and Sparta represented very different cultural extremes. Athens was a hotbed of political, artistic and intellectual experimentation and change. It was an “open” city, and foreign visitors were welcome to come and go, and participate in the cultural life of the city. The Athenians made up the rules as they went along and changed them frequently.

Sparta was the most stable society of the ancient world, an oligarchy with a constitution that remained in place for centuries. Sparta was “closed” to outside ideas, outside people and outside influences. The Spartans believed they had perfected the city state, producing citizens of superior virtue through a rigorous state-sponsored educational system. To live in Sparta was to do things the Spartan way. And that way was probably the vision of a single man.

Does all this sound familiar?

When Greece was confronted with a massive invasion by the Persian Empire, Athens and Sparta united to defeat the invaders.

After the war, the two city states (especially Athens) continued to expand their spheres of influence in Greece and much of the Mediterranean, leading to conflict between the two powers and ultimately the disastrous Peloponnesian War.

The war destroyed Athens, weakened Sparta and left Greece in ruins. It ended the “Golden Age” of both Athens and Sparta.

Google and Apple

Like Athens and Sparta, Google and Apple represent totally different cultures — Google is radically open and experimental. Apple is closed and controlling, but disciplined, focused and obsessed by its own sense of superiority.

Like Athens, Google is the everything company. They started with Search engines, but now are in the businesses of email, office suites, social networking, operating systems, blogging platforms, advertising, mapping, downloadable content, mobile phone handsets and tablets and more. They’re working on a self-driving car and cyborg glasses.

Like Sparta, Apple focuses on just a few key objectives. While Google’s Android platform runs on hundreds of devices, Apple’s runs on one, for example.

Ultimately, Apple wants to dominate just one thing: The premium, high-quality “sweet spot” experience for content creation and content consumption.

And like Sparta, Apple expects to control what it controls totally, and for others to stay out of Apple’s business. Rivals who challenge Apple for dominance on its own territory are to be crushed.

Like Athens, Google can’t help constantly expanding its scope until it inevitably overlaps into Apple’s spheres of influence.

Conflict is inevitable.

How Did It Come to This?

Google and Apple used to be allies. When Google went looking for a CEO three years before their IPO, they decided that only Apple founder and CEO Steve Jobs was good enough to lead the company. Google’s founders believed Jobs to be the best CEO in the world. Turns out he was happy staying at Apple, so Google hired Eric Schmidt instead.

At the time (2001), Google’s search engine business and Apple’s computers and iPod businesses seemed complimentary. The companies admired and supported each other and were natural allies. In 2006, Apple invited Schmidt to join their board of directors and he accepted.

When Apple announced its entry into the mobile handset market in January of 2007, Google was not considered a rival, but a partner. The first iPhone came with Google’s Maps app and YouTube.

Sure, Google had purchased Android in 2005. But even as late as December of 2007, after the iPhone had been shipping for months, Android phones looked more like BlackBerrys than iPhones, with physical keyboards and navigation via buttons rather than multi-touch screens. Android was aimed at mobile phone markets that Apple wasn’t targeting.

Apple wanted to reinvent how phones looked, felt and functioned, and expected its partners to stay out of the way.

But Google eventually transformed Android to look and feel a lot more like the iPhone operating system. It was all screen and no keypad, with swiping and pinching gestures and an app store model for apps.

Jobs was furious about Google’s decision to make Android look and feel more like iPhone. He later told biographer Walter Isaacson that he was “willing to go thermonuclear war” on Google for making an iPhone-like Android.

Google has also entered other traditional Apple businesses, including every imaginable form of downloadable content.

In the Fall of 2009, it was “mutually decided” that Schmidt should leave the Apple board due to “potential conflicts of interest.” (Translation: Apple kicked him off the board because Google is now the enemy.)

Rather than suing Google, which Google could afford financially and which would have enabled a relatively quick settlement or resolution of some kind, Apple instead has been waging a series of endless proxy wars — suing Google’s OEM partners for patent infringements in multiple countries.

Even more damaging to Google is that Apple has apparently decided to start phasing out Google’s apps and services from the iOS platform.

Apple replaced Google Latitude with Find My Friends; Google Places with Yelp; Google Maps with Apple Maps; Gmail and Google Talk with iMessage; and ultimately I believe they’ll replace even Google Search with Siri, plus other search engines (for now Siri uses Google Search and other services).

All this replacement of Google apps and services involve a dramatic reduction in Google revenue. One analyst said that iOS apps account for about 40 percent of Google’s mobile revenue (which is about 2% of its overall revenue). However, since the future of advertising will become increasingly mobile, the lost revenue from iOS in the future is probably massive.

Apple’s “scorched earth” policy on Google apps is similar to a tactic used by the Spartans during the Peloponnesian War: Year after year, the Spartan army advanced on Athens. When citizens took cover inside the city walls, the Spartans’ burned down surrounding farms and olive trees, depriving Athens of some of its income.

Apple is also resorting to another Spartan tactic: alliance with the “barbarians.” (The Greeks called any non-Greek speaking people “barbaros,” which is the origin of the English word “barbarian.”)

The Peloponnesian War dragged on for 27 years in part because while Sparta was superior on land, Athens was superior on sea (Sparta had no real navy of its own). Sparta was finally able to defeat Athens through an alliance with an enemy of both Athens and Sparta: The Persians.

Likewise, Apple has no social network of its own, and so has made a pact with a rival of both Google and Apple: Facebook.

This is a shocking alliance, because Facebook has encroached on Apple’s businesses just like Google did, but less aggressively and less successfully.

In September, Facebook entered into a bundle of partnerships that made it the Internet’s “primary entertainment hub,” according to The New York Times. Facebook is rumored to be launching a phone next year using executives poached from Apple, again according to the Times.

Facebook has also launched a series of apps that replace Apple’s own apps, including a Messenger app that competes with iMessage; and a Camera app that competes with Apple’s Camera app.

Despite all this encroachment into Apple’s business, Apple still announced Monday major integration of Facebook into both iOS and OS X.

And Apple used precious time during the keynote to take conspicuous jabs at Google and Android.

It looks to me like Apple has become obsessed with Google to the point where they are making irrational decisions. The Wall Street Journal has even called it Apple’s “crusade against Google.”

And, of course, Google will fight back by continuing to grab global market share with Android, additional encroachments on Apple’s core businesses, and who knows how else.

Open warfare between Google and Apple is inevitable, just as it was for Athens and Sparta. And it will probably end the same way: with both parties diminished.

Competition is good. But this isn’t healthy competition. When companies start making decisions that are irrational, or that don’t benefit them from a strategic business perspective, it’s something more than business.

Like Athens and Sparta, Google and Apple could have ruled the world together. Together, they are unstoppable.

Instead, it appears, they will try to destroy each other — and they will partly succeed.

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