First, you have to understand that businesses and their markets don't stand still. (hello newspapers, music companies, tellie networks, phone companies).
Interestingly the reason Google are getting into phones and Apple into advertising are essentially the same reason, the explosion of smartphone based apps.
Apple was surprised by the intensity and diversity of apps for the iPhone. Remember how reluctant they were to enter the space initially? Probably Google was surprised too (don't forget that Eric Schmidt recussed himself from iPhone discussions since quite awhile). The interesting thing is that both Apple and Google came to realise the revolutionary truth in the phrase "there's an app for that".
Google was happy to work with Apple in the early days of the iPhone. Google were more than happy to see mobile safari traffic bloom because that meant google could serve ads to all those folk with iPhones and other phones coming down the line.
But as more and more companies realised the power of creating bespoke apps for their businesses for the Android, iPhone and maybe a few others, it became clear to all players that a significant portion of the future of smartphone advertising was in mobile apps.The number and variety of these apps will continue to grow exponentially. Apps are faster than web pages and can be taught to do things that aren't practical on the desktop web. Companies like them because they are in full control of the user experience. And they can sell advertising through them. Google can't sell advertising through bespoke smartphone apps.
As Apple was rapidly becoming the significant player in the smartphone space Google realised that they were in trouble. While desktop and laptop computer advertising is no longer a serious growth market (except maybe in China where that government will determine who wins that battle and it probably won't be Google), smartphone advertising is a huge growth market. Huge. And the field is totally undefined.
What the search engine had done to allow Google to become a behomth in advertising, the smartphone app was set up to do for Apple for the future of advertising. Google had no way in if Apple decided to shut them out. And for Apple the sheer size of the revenue potential would be enough reason for Apple to shut Google out. For Google it was too big a risk to take not to take some kind of action.
So for Google that means Android (and to a lesser extent, to capture the cheap computer end of the market, Chrome). And to make Android a serious competitor, Google have to push and push and push. They couldn't leave it up to Sony and Nokia and Motorola who never really got phones and only survived in that space because each was as bad as the other, they would have needed 4.5 eons to invent what Apple did in cupertino.
Google realised that ironically its phone business model mimicked Microsoft's business model for Windows OS (how they must have winced at that). Google and Microsoft make the OS, hardware producers make the hardware. Well, we've seen where that goes. It stifles creativity and leads to commoditisation of hardware except for a few niche players.
Google would have to rely on the phone manufacturers to do a good job making Android phones, not likely given their track record, Google couldn't have been too thrilled at those odds, especially with so adept a competitor as Apple. So they tried to work with Motorola to produce a state of the art phone and must have realised the limitations so as a backup they talked to HTC about building the gphone to Google's specs.
For Google this is a tightrope, they can't kill their competition in the android market, they don't want to be in the phone business, they want to be in the advertising business. But to do that, they need supercool phones to compete with the iPhone. And to prod that market, they made the gPhone.
Apple of course doesn't have that weakness. Like the Mac/OSX market, they control the hardware and the software. They can be focused on what they develop, They can define the features they feel will push the platform and the profits (this is about profits boys and girls, its not about open software and all that other meta nonsense from geeks who eat pizza in front of their glowing screens and extol the virtues of Linux.
A key point here is that Apple is pursuing and defining a new growth market of vast proportions and Google is trying to defend what it had hoped would be the new growth market in which it, Google, would be dominant.
Although most "pundits" are talking about this as Google challenging Apple its really the other way around. This is a defensive move for Google against Apple's growing domination.
So on Tues, 5 January we have Google launching their own smartphone and Apple announcing their purchase of an app based advertising specialist. These companies, once very cooperative, find themselves jockying for position in this newly undefined field of smartphone app advertising. There's likely room for more than one winner but clearly big money is stake.
A key point here is that Apple is pursuing and defining a new growth market of vast proportions and Google is trying to defend what it had hoped would be the new growth market in which it, Google, would be dominant.
Although most "pundits" are talking about this as Google challenging Apple its really the other way around. This is a defensive move for Google against Apple's growing domination.
I think your right and it will be especially bad for Google if the deal with Admob goes down in flames. Google's model is different than MS in that MS gets money no matter what but Google only gets money if the ad revenue keeps coming. If Apple can use Quattro to its best advantage and Google loses Admob or Apple is able to leverage the app store with ads faster than Google can the later might have a problem. Right now nobody is really in the drivers seat.
Comments
Interestingly the reason Google are getting into phones and Apple into advertising are essentially the same reason, the explosion of smartphone based apps.
Apple was surprised by the intensity and diversity of apps for the iPhone. Remember how reluctant they were to enter the space initially? Probably Google was surprised too (don't forget that Eric Schmidt recussed himself from iPhone discussions since quite awhile). The interesting thing is that both Apple and Google came to realise the revolutionary truth in the phrase "there's an app for that".
Google was happy to work with Apple in the early days of the iPhone. Google were more than happy to see mobile safari traffic bloom because that meant google could serve ads to all those folk with iPhones and other phones coming down the line.
But as more and more companies realised the power of creating bespoke apps for their businesses for the Android, iPhone and maybe a few others, it became clear to all players that a significant portion of the future of smartphone advertising was in mobile apps.The number and variety of these apps will continue to grow exponentially. Apps are faster than web pages and can be taught to do things that aren't practical on the desktop web. Companies like them because they are in full control of the user experience. And they can sell advertising through them. Google can't sell advertising through bespoke smartphone apps.
As Apple was rapidly becoming the significant player in the smartphone space Google realised that they were in trouble. While desktop and laptop computer advertising is no longer a serious growth market (except maybe in China where that government will determine who wins that battle and it probably won't be Google), smartphone advertising is a huge growth market. Huge. And the field is totally undefined.
What the search engine had done to allow Google to become a behomth in advertising, the smartphone app was set up to do for Apple for the future of advertising. Google had no way in if Apple decided to shut them out. And for Apple the sheer size of the revenue potential would be enough reason for Apple to shut Google out. For Google it was too big a risk to take not to take some kind of action.
So for Google that means Android (and to a lesser extent, to capture the cheap computer end of the market, Chrome). And to make Android a serious competitor, Google have to push and push and push. They couldn't leave it up to Sony and Nokia and Motorola who never really got phones and only survived in that space because each was as bad as the other, they would have needed 4.5 eons to invent what Apple did in cupertino.
Google realised that ironically its phone business model mimicked Microsoft's business model for Windows OS (how they must have winced at that). Google and Microsoft make the OS, hardware producers make the hardware. Well, we've seen where that goes. It stifles creativity and leads to commoditisation of hardware except for a few niche players.
Google would have to rely on the phone manufacturers to do a good job making Android phones, not likely given their track record, Google couldn't have been too thrilled at those odds, especially with so adept a competitor as Apple. So they tried to work with Motorola to produce a state of the art phone and must have realised the limitations so as a backup they talked to HTC about building the gphone to Google's specs.
For Google this is a tightrope, they can't kill their competition in the android market, they don't want to be in the phone business, they want to be in the advertising business. But to do that, they need supercool phones to compete with the iPhone. And to prod that market, they made the gPhone.
Apple of course doesn't have that weakness. Like the Mac/OSX market, they control the hardware and the software. They can be focused on what they develop, They can define the features they feel will push the platform and the profits (this is about profits boys and girls, its not about open software and all that other meta nonsense from geeks who eat pizza in front of their glowing screens and extol the virtues of Linux.
A key point here is that Apple is pursuing and defining a new growth market of vast proportions and Google is trying to defend what it had hoped would be the new growth market in which it, Google, would be dominant.
Although most "pundits" are talking about this as Google challenging Apple its really the other way around. This is a defensive move for Google against Apple's growing domination.
So on Tues, 5 January we have Google launching their own smartphone and Apple announcing their purchase of an app based advertising specialist. These companies, once very cooperative, find themselves jockying for position in this newly undefined field of smartphone app advertising. There's likely room for more than one winner but clearly big money is stake.
A key point here is that Apple is pursuing and defining a new growth market of vast proportions and Google is trying to defend what it had hoped would be the new growth market in which it, Google, would be dominant.
Although most "pundits" are talking about this as Google challenging Apple its really the other way around. This is a defensive move for Google against Apple's growing domination.
I think your right and it will be especially bad for Google if the deal with Admob goes down in flames. Google's model is different than MS in that MS gets money no matter what but Google only gets money if the ad revenue keeps coming. If Apple can use Quattro to its best advantage and Google loses Admob or Apple is able to leverage the app store with ads faster than Google can the later might have a problem. Right now nobody is really in the drivers seat.