With Nexus One And Quattro, The Knives Are Out Between Apple And Google
07 Jan 2010 // 26 comments // Internet Development
Two days ago, the knives came out in full view between Apple and Google. On the same day that Google launched its latest Nexus One Android phone, Apple announced the $275 million acquisition of Quattro Wireless, a mobile advertising platform. It was as if Steve Jobs was sending Eric Schmidt a very public message: You mess with my business, and I’ll mess with yours.
With the Nexus One, Google basically designed its own phone and is selling it directly to consumers through a new Google online phone store. It is getting into Apple’s territory: making devices and merchandising them. Likewise, by buying Quattro, Apple is moving into Google’s territory: namely, advertising. The Quattro deal was also a response to Google’s previously announced $750 million acquisition of mobile advertising network AdMob, which Apple also tried to buy.
Apple and Google have been warily circling each other since last summer when Eric Schmidt left Apple’s board of directors because Google was becoming too much of a direct competitor. As I noted back then:
Asked to choose between furthering Apple’s mobile agenda or Google’s, Schmidt must choose Google’s. It is his fiduciary duty. That conflict is only going to grow.
This week that conflict came to a head. Both companies are on uncertain ground. Google is not a device company any more than Apple is an advertising company. Of course, Apple doesn’t like the threat that Android represents. It’s Windows all over again: a single OS on many devices.
But Apple is also afraid of Google’s blade coming dangerously close to its own heart. Many of the iPhone’s core apps are made by Google, such as Gmail, Maps, and YouTube. Apple cannot afford to cede more control of the iPhone over to Google. This is the reason why it blocked the Google Voice app from the iPhone, and it is the reason why it bought Quattro. To the extent that advertising is going to be a revenue stream for iPhone apps, Apple needs to have a play there. And that is what the Quattro deal is about—ads in apps, not on mobile Websites. If Apple hadn’t bought Quattro, it would just be handing over advertising dollars on the iPhone to Google and AdMob. Now watch as Apple tries to make Quattro the preferred advertising network for iPhone apps.
Google is equally out of its element. I’s taking a huge risk by pushing its own Android phones at the expense of its partners like Motorola. That strategy could backfire if other mobile phone manufacturers decide Android is just not worth supporting. You know how most knife fights end. Both parties usually end up pretty bloody.
Photo credit: Flickr/Daniel R. Blume.
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Tags: acquisition, admob, advertising, advertising company, all, Android, android phone, android phones, Apple, Between, core apps, Daniel R. Blume, Droid, droid phone, eric schmidt, fiduciary duty, Google, google voice, Iphone, Iphone Apps, Knives, mess, mobile advertising, mot, Network, Nexus, nexus one, nexus one weakness, Phone, proxy, public message, Q, Quattro, s board, Steve Jobs, steve jobs on nexus one, View, Web, www
This entry was posted on Thursday, January 7th, 2010 at 8:45 pm and is filed under Internet Development. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
still google would have entered into Apple’s territory…
May the best product win which is iPhone
One of the weakness or let’s say cons of Nexus one is its still futile music store. Compare to Apple’s gargantuan iTunes store. Google on the other hand is the ‘king’ in terms of its advertising power both on desktop web, mobile web. Apple know’s this and that’s why they bought quattro.
Question is how does BIG G really market their SUPER DUPER PHONE? Nexus one marketing details: http://bit.ly/n…-mashup-details
Hey guys I lost my microsoft.
Have anybody seen it?
Great, I see it now. Buy your mac, and you only have to see two ads before you’re allowed to use it…okay, I don’t see this going very far for apple.
Maybe Jobs but not Schmidt.
I am. Although it’s not a law of nature, it does seam to happen that whenever there’s competition, the consumer wins. (Unless the competition is among consumers).
I don’t see Apple winning in the ad space specifically because they have a history of closed environments.
Developers aren’t going to be moving to Andriod, they are going to be making apps for all devices.
Therefore, the ad network which targets developers on all devices will be the one who likely will gain market share.
Apple likely won’t be able to do that due to their history, and being considered the maker of the iPhone. Google is known as an advertiser first, that is a huge benefit. Plus they have andriod, and are into the whole open web thing. When GWT automatically exports your code to multiple handsets and app stores, I think we’ll see who the winner is.
Folks, have no clue who runs the internet and the world. It doesn’t matter who comes on top, it has already been decided.
Don’t worry, you will still get a crappy battery life for another 10 years…when the US military has much more advanced technology.
stve jobs and eric are both members of freemasonary
Mobile wars will dominate the decade
none of the applications are built by google, but are given significant support by google. Example, youtube re-encoded all their videos specifically for iphone youtube app.
Concerning maps, apple did build the maps application but uses google maps for the images. They have recently bought a company and will be phasing google out of this as well.
1) He always had excused himself from iPhone discussions
2) When did Google decide to brand their own phones? To date, I’m still unclear how much design was done by HTC versus Google. – for all we know, the decision to have a Google phone store was made after Schmidt quit.
not really, apple knows how to make good products and they also have a tremendous amount of money in da bank.
Fun. In 2010, you have to give the advantage to the company that has the best integration with leading edge web services, which would seem to be Google at this point (although the Lala and Proximity acquisitions could yield interesting fruits soon). Just as Google’s adopted some Apple ways (creating the “whole widget”) Apple is going to have to adopt a few more of Google’s methods to stay in this fight in the long term. Annual updates on their web services (i.e. mobile.me features) are totally inadequate compared to Google’s rolling updates on all of their services. Frankly, they need to make more software products and risk letting them fail like Google does if they want to create more hits in the world of web services. Their perfectionist streak is working against them in this agile, rapidly moving marketspace.
Excellent Post! Loved it.
Google has to become both a Device Maker and ISP, just in case Facebook ends up becoming The Internet
Perhaps “Don’t be evil” only applies to users?
I don’t think other partners would have issues with google making its own phones. Before android, there was symbian mostly owned by nokia and it didn’t stop sony and other from making symbian phones, nobody was freaking out because nokia was doing symbian phones too. And Android is much more open than symbian.
GOOG may be able to marginalize APPL but it is a long long way from even hurting MSFT – don’t kid yourself…them boys in Redmond are probably the most dirt bag fighters after Intel.
What no one seems to want to discuss is the fact that Eric Schmidt was on the Apple board for SO MUCH of the time that Google was working on a phone, while proclaiming loudly, in his evil ‘do no evil’ voice that Google had no plans for a phone.
EVeryone is entitled to secrecy until the point where it makes you act unethically at your job (board member at Apple)
Google getting into Retail, and Apple getting into Advertising.
2010 will be a interesting year.
you’re right about gmail, but very wrong about the other two
Just take one look at the two execs – Schmidt wears a flak jacket!
Doesn’t this Google vs. Apple knife remind anyone else of Steve Jobs long ago fight with Bill Gates. Steve Jobs had the computer industry by the nape of its neck and he lost to the tougher/meaner Bill Gates. Now tough and mean tuy is Eric Schmidt, who Steve Jobs let stay in the henhouse for way too long. Now Google is breathing down Apple’s neck w/ the Nexus One. Google is amazing – they are going to marginalize both Microsoft and Apple. Who would have believed that!!
I see Apple faring much worse in this fight. I don’t think the Nexus One threatens to cause other manufacturers to walk away from Android. The Nexus One is just another handset by most accounts, especially for people buying it with a two year contract, and the price tag for an unlocked one won’t make that an overly popular option. Android is a rapidly growing platform, with an exploding app market, that is gaining plenty of popularity with consumers. Google appears to be doing very well, and I don’t think that’s likely to change with the Nexus One. To top it all off, they’ve been doing the advertising thing for years, and have arguably the largest and strongest ad network on the Internet. The AdMob acquisition will just be putting them in position to expand that already successful business model.
Apple, on the other hand, is the victim. 18 months ago Android was an obscure platform only known by geeks and tech journalists. Apple reigned supreme in the smartphone world and everyone wanted an iPhone. The App Store was (and is) booming, and the sky was the limit for Apple. Now, the App Store is still expanding rapidly, but the Android Market is growing faster. Developers are constantly frustrated and confused by Apple’s vetting process, and Android is quickly becoming a strong alternative. In fact, the one gripe about the Android Market is its interface and app marketing, but that’s bound to change soon as Google gains market share (and developer share). Apple is a newcomer to the ad network world, and it may be a challenge to get companies and developers to use their ad network without pissing them off.
As you said, knife fights are bloody for all parties involved, but in the end there’s always a winner, and I think Google’s in a much better position for the long term win.
Gmail is not a core application on the iPhone and I don’t believe that the YouTube application is built by Google. It isn’t even clear that the Maps application was built by Google.
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