Originally Posted by Tulkas
They do seem to have some interest in search. I am sure they could use their data centre to power the Siri searches, but those searches are much more narrowly focused than google searches. If you are doing general knowledge or trivia questions, you would use google. If you are looking for a local restaurant or want a taxi, you might use Apple/Siri. It is an encroachment on google's turf, but doesn't seem threatening to me.
I don't think it's easy to topple Google in the search business. But what Apple can probably do well is that Siri kind of stuff. Android's now bringing similar features on stream with the Places app and Voice Search. And Apple should (and probably will) launch some kind of local search feature using Siri.
As far as the cloud goes, I really don't think Apple needs to tackle search to have a solid cloud product that interests consumers. What's attractive about Google's cloud? It's all the stuff like GMail, Calendar, Contacts, (to some extent) Google Talk, etc. This all stuff that Apple could easily match.
The problem here though is Apple's insistence on charging for this stuff. I get why they do it (ad-free). But ultimately, as Android gets better and better on base usability of the device, and feature differentiation starts to matter more, iOS is going to feel like a nickel-and-diming experience to the average consumer. And let's face it, while the average iPhone user is a more premium customer, just as much of that premium factor comes from the fact that they are smartphone users as they are Apple users. And once these consumers start figuring out that things like Navigation, e-mail, photo-sharing are free on Android, it'll only help the migration.
Personally, I think there's a case to be made for Apple to actually position itself as a premium brand (right now they say they are, but their prices say otherwise). Charge more for their handsets than other OEMs but offer ad-free, superb cloud services (MobileMe) for free right out of the box. Who would not pay $300 for an iPhone (on contract) if it included free lifetime MobileMe? As it stands though, if you are a heavy user of Google's services (maps, Gmail, search, news, etc.) why would you choose anything else over an OS optimized to run with those services?
As for navigation, I really think Apple should bite the bullet and acquire TomTom (that pile of cash has to be good for something). iPhone with free TomTom would probably be more compelling than Nokia's navigation or Android with Google Navigation.