A new pattern is emerging in the Apple-Google feud. Apple is rapidly cutting the ties with its former ally’s services, creating its own alternatives in areas like mapping and video. Meanwhile, Google is trying to compensate by carving out a position in iOS on its own merits, rather than by licensing its technologies to Apple. It has been accelerating the process of porting key Android applications to the iPhone and even adding iOS-specific enhancements, with Voice Search the latest example.
YouTube is the latest area where Apple is trying to reduce its reliance on its arch-rival. It is poised to drop the embedded app for Google’s popular video service from the next release of iOS, whose release indicated a stepped-up attempt to make the platform Google-free. According to an Apple statement, its licence to include YouTube in core iOS has ended though it will still be accessible via the Safari browser, or via Google’s own YouTube app, downloadable from App Store.
So the consumer impact may be minimal, but it shows Apple distancing the base iOS platform further from Google services, and that is often the prelude to its creating its own alternatives. It has been a slow mover on streamed and consumer-created content, compared to many purer web players, as it defends its traditional iTunes business models, but it has become more focused on online and cloud content under Tim Cook’s CEOship. So we may expect to see Apple stepping up video offerings to eat into YouTube’s dominance and push its own brands, as iTunes expands further into streaming.
The pattern was set in mapping. Earlier this year, after buying a string of specialist start-ups, Apple announced the launch of its own mapping services for iOS6, displacing Google. The new mapping solution for iOS6 draws on data from TomTom rather than the search giant, and supports crowdsourced traffic information plus free turn-by-turn navigation, which is integrated into Siri and brings iOS up with Google and Nokia Maps. As in Google’s own recent map announcements, there is the option of displaying results in 3D.
iPhone users will still be able to opt for the Google Maps app if they prefer, but the default offering is inevitably the most heavily used, and that not only saves Apple from paying fees to Google, but improves its access to personal data about its users’ locations and preferences, so valuable for development of future services, and for advertising.
According to Ronan de Renesse, principal analyst at Analysys Mason, Google Maps could lose up to one-third of its mobile users in the west from Apple’s change ‘ the firm has conducted a study which shows that iOS contributed to 28% of Google Maps users in France, Germany, Spain, the UK and the US. And Piper Jaffray analyst Gene Munster says Apple will contribute about 40% of Google’s $4.5bn of mobile revenue this year, a figure the iPhone firm will want to reduce. Munster said recently that licensing deals integrating Google’s Maps and Search services into iOS will contribute about $1.8bn to Google’s mobile revenues, and 2% of its total sales.
Apple is even reducing its ties with Google’s most dominant app, its search engine, though that does remain the iOS standard. It is offering Baidu and Chinese social network Sina Weibo as built-in options for iPhones sold in that country, and it allows any Safari user to set Bing, rather than Google, as the mobile default. It is not excluding Google, but we can all remember how Microsoft’s Internet Explorer slowly but surely lost its oxygen supply once it became easier for PC users to change to another browser. Apple will be hoping for the same effect on Google, and may well harness allies like Facebook to help by promoting their services where these encroach on the Android giant’s.
Overall, Apple is pursuing a series of partnerships to replace or sideline Google. The strategy is to integrate its own new offerings, or those of third parties, deeply into iOS to upgrade the mobile OS experience, and make sure that new generation has minimal Google presence. That would leave the search leader struggling to enhance Android to a similar level of distinctive, integrated experience. Gene Munster, Piper Jaffray’s (bullish) Apple watcher, wrote in a recent research note: ‘Google is trying to create a unique mobile experience by further integrating its own variety of services into Android. While currently the battle has no clear leader, we believe that the next phase of mobile OS innovation, integrated services, will begin to favor Apple as the frontrunner. At this point we believe Apple’s strategy of integrating best of breed third party partners gives them the upper hand as it forces Google to venture outside its core competency of search.’
In other words, the new battle is about the services integrated deep into the OS, which will help the platform vendors keep their individual operating systems relevant and distinctive even in the age of cross-platform HTML5. That theoretically OS-neutral web approach will make the current battleground ‘ the number and quality of third party apps a company can attract ‘ less important, leaving Apple, Google and Microsoft to turn attention once again to their native assets and deeper strategic alliances.
So far, Google has more homegrown offerings in important areas ‘ Google Offers rather than a Groupon deal for iOS; Google Shopping and Checkout, rather than Amazon and eBay/PayPal, Google+ rather than Facebook. However, in many of those cases the third party brands are stronger and if Apple can create a superior experience for them on iOS than elsewhere, through integration, the combination will be dangerous to Android and to Google’s dream of a fully controlled and branded, end-to-end web services offering.
There is still much to play for. Google is more advanced in some respects ‘ Wallet versus PassBook for instance, and of course in search ‘ while Apple has the edge with iTunes and Siri. The latter is the focus of the latest counter-attack by Google, which has greatly upgraded its voice activated capabilities for Android and is now bringing these to iOS, taking on Siri head-to-head. This is a risky game of trying to create a version of its broad Google-branded web portfolio for iOS, which could be more attractive to users than Apple’s own offerings ‘ rather as Amazon is doing to Google on Android. It is a tough call, but one Google has to attempt to keep its profile high on one of the largest mobile platforms.
Google has offered Voice Actions for Android devices since 2010 but a few weeks ago unveiled a significantly overhauled version, along with Jelly Bean (Android 4.1). Now called Voice Search, the product combines speech recognition tools and, according to Google, a deeper understanding of natural language. It also draws on Knowledge Graph, a database of more than 500m people, places and objects with 3.5bn attributes and connections. On the Google Blog, SVP of search, Amit Singhal, wrote: “You just need to tap the microphone icon and ask your question, the same way you’d ask a friend. It works for everything from celebrity factoids to the height of Kilimanjaro and more.’ The feature will now be available for iPhones and iPads running iOS 4.2 and above.
As Apple and Google move into the next phase of their mobile war, focusing on integrated web platforms, social/location and new search mechanisms, the maps and Siri moves will soon be seen just as preliminary skirmishes.