Oppenheimer: Bing deal could bring Apple more risk than reward

Posted:
in iPhone edited January 2014
A new analysis suggests an Apple-Microsoft deal to bring Bing search to the iPhone could carry great risks for Apple, which has formed an identity by disparaging the Windows platform in its "Get a Mac" ads.



A team of analysts from Oppenheimer offered their insight in a research note to investors Wednesday. Breaking down the implications of a Bing search agreement between Apple and Microsoft, the analysis was provided in response to an earlier report alleging that the two rivals are currently in talks to replace Google as the primary search provider for the iPhone, as well as the Safari browser.



Analyst Yair Reiner said the battle lines have been drawn between Apple and Google, though "overt warfare" between the two companies has yet to erupt. He said that the companies are at odds because Apple seeks to be the "special box in a world of generic services," while Google aims to become the "special service in a world of generic boxes." Now, it's possible, Apple's enemy in Microsoft could become its friend with a Bing partnership.



"Cozying up (to Microsoft) could bring more risk than reward, not least because it would clash with the Mac vs. PC campaign and the Apple brand identity that has coalesced around it," Reiner wrote.



For Google, such a deal would be negative in the long-term, but shouldn't come as a surprise to those who watch the technology industry. Analyst Jason Helfstein said users will likely still be able to change the default settings on their device, or download the Google Apps software.



As for AT&T, the exclusive carrier of the iPhone in the U.S., analyst Tim Horan said the discussion serves to highlight the loss of control the wireless provider has over its customer base, thanks to Apple and the iPhone. AT&T is on the losing end because it does not receive any of the revenue associated with software on the App Store, yet is the use of many of those applications that has resulted in poor network quality.



"We believe this will intensify the service providers' promotion of alternative handset suppliers and their own applications market," Horan wrote. "We would expect the service providers to work more intensively with Google, Nokia, RIM etc. to create devices that are comparable to the iPhone, but this will take some time."



Microsoft analyst Brad Reback with Oppenheimer said Microsoft's desire to grow the Bing brand and increase its market share by any means indicates the Redmond, Wash., company would be willing to strike a deal with Apple for the right price. He noted that Microsoft has already released a Bing application for the iPhone.



"We believe (Microsoft) will not grossly overpay so as to negatively impact the future profitability from such a deal," Reback said. "As a reminder, MSFT recently replaced (Google) as (Verizon's) default search engine in a five-year deal estimated to be worth $500M."



Speculation of a potential Apple deal for Bing has arisen in the past, due to the growing tension between the iPhone maker and Google. Some have speculated that Apple could look to remove Google's presence entirely from its devices.



While Apple's non-acceptance of the Google Voice application into the App Store highlighted the differences between the two companies, it could be a sign of things to come. Last year, Apple revealed it was looking to hire someone to create a new and improved Maps application for the iPhone. The current mapping software is powered by Google.



Combined with Apple's purchase of Google Maps competitor Placebase last summer, there remains ongoing chatter that a new Maps application created by Apple could appear in a forthcoming update to the iPhone operating system.
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Comments

  • Reply 1 of 127
    Search is search, as long as the end user gets decent results and can get to what it is they are looking for, I don't see the bi(n)g deal. Chill out---besides the Bing! app itself is nice and there is a Google app if their is that much concern. Common sense should prevail here.
  • Reply 2 of 127
    solsunsolsun Posts: 763member
    Whether there is any truth to this rumor or not.. It sure is giving Microsoft's Bing a lot of free publicity..
  • Reply 3 of 127
    This guy Reiner is clueless. I say good for apple, and the world if someone can put and end to google's dominance, their dictatorship over who appears and who doesn't on the web. If it has to be bing (what a name....tststst...) so be it, although I would go with yahoo, and altavista specifically.
  • Reply 4 of 127
    Quote:
    Originally Posted by AppleInsider View Post


    A new analysis suggests a Apple-Microsoft deal to bring Bing search to the iPhone could carry great risks for Apple, which has formed an identity by disparaging the Windows platform in its "Get a Mac" ads.



    ...



    "Cozying up (to Microsoft) could bring more risk than reward, not least because it would clash with the Mac vs. PC campaign and the Apple brand identity that has coalesced around it," Reiner wrote.



    Apple would risk clashing with its brand identity? I fail to see how. If that were the case, why does Apple continue to offer Office for Mac (when Apple itself offers iWork) and Boot Camp to run Windows (when Apple itself offers OS X) for its products? Partnering with Microsoft to bring Bing (an internet search engine) to the iPhone pails in comparison to the two aforementioned capabilities.
  • Reply 5 of 127
    I don't want a new map application! I like google's mapping software. I don't want to be forced into changing!
  • Reply 6 of 127
    Quote:
    Originally Posted by iReality85 View Post


    Apple would risk clashing with its brand identity? I fail to see how. If that were the case, why does Apple continue to offer Office for Mac (when Apple itself offers iWork) and Boot Camp to run Windows (when Apple itself offers OS X) for its products? Partnering with Microsoft to bring Bing (an internet search engine) to the iPhone pails in comparison to the two aforementioned capabilities.



    I agree 100%. They already work with microsoft so it's not THAT big of a deal, although when you buy a stock mac you don't see any microsoft logos anywhere, whereas a stock iphone would have bing right there in safari (and the iphones superior mobile browser is a big selling point to a lot of people)
  • Reply 7 of 127
    Quote:
    Originally Posted by jblenio View Post


    I don't want a new map application! I like google's mapping software. I don't want to be forced into changing!



    I'd rather have their new turn by turn nav app on the iphone.
  • Reply 8 of 127
    gazoobeegazoobee Posts: 3,754member
    Quote:
    Originally Posted by dphayes77 View Post


    Search is search, as long as the end user gets decent results and can get to what it is they are looking for, I don't see the bi(n)g deal. Chill out---besides the Bing! app itself is nice and there is a Google app if their is that much concern. Common sense should prevail here.



    I agree that people are getting their panties in a twist over nothing here, but not with your assessment of Bing.



    Personally, I don't know any one who searches from that impossibly small, useless field in the mobile Safari bar and I'd think it a bonus to the UI if it was removed. If you want to search on the iPhone, the Google app is far better for the purpose and seamlessly passes control over to Safari once the search is done. Dedicated apps for search (not the browser), are definitely the best way to go on mobiles.



    The Bing app is already available so all we are talking about here is Microsoft being added to the list of search providers in mobile Safari and maybe being the default when you first fire up the phone. Who cares really?



    Who "wins" in mobile search on the iPhone will ultimately come down to who has the best app and despite the bad design of the Google app in some respects, Bings app is far stupider and harder to use effectively IMO. If Google can give the best search results, and keep on top with the best search app, they don't have anything to worry about at all. It's Microsoft that will end up paying through the nose for a position on the iPhone that won't really do them much good beyond growing a bit of brand recognition.
  • Reply 9 of 127
    Apple should just make their own search engine if they don't like using Google because of their rivalry. They should definatly not turn to microsoft.
  • Reply 10 of 127
    vinney57vinney57 Posts: 1,162member
    The analysis is nonsense; clearly a Google-inspired plant to counteract the obviously Apple-planted rumour.



    Its just games. Apple wants Google to know that they are seriously pissed and no longer BFF's
  • Reply 11 of 127
    Quote:
    Originally Posted by vinney57 View Post


    The analysis is nonsense; clearly a Google-inspired plant to counteract the obviously Apple-planted rumour.



    Its just games. Apple wants Google to know that they are seriously pissed and no longer BFF's



    and they want their cd's back.
  • Reply 12 of 127
    If Verizon signed a contract with Microsoft, does that mean if they are to bring the iPhone to their network, it would be obligated to use Bing? Perhaps this is the reason for this discussion? Google could remain the default on AT&T and everywhere else in the world.



    On the other hand, I don't think Version WebOS or Android devices are forced to use Bing, right? (disclaimer: i'm Canadian, so I have no clue)
  • Reply 13 of 127
    Quote:
    Originally Posted by jblenio View Post


    I don't want a new map application! I like google's mapping software. I don't want to be forced into changing!



    The iPhone's Maps applications is made by Apple. Google merely delivers the content. There's no mention of Google inside the app. One could imagine the same happening with Search in Safari. Google search will turn into Apple Search, with MS delivering the content.
  • Reply 14 of 127
    I seriously don't want "BING" anywhere near my iphone, to be honest it's not even enough to be able to set another search as default like it is now, I just don't want it on my iphone.
  • Reply 15 of 127
    rot'napplerot'napple Posts: 1,839member
    Apple treated us to Google for all these years, until Google came out with a competing mobile phone OS and hardware...



    Now Apple is in talks with Bing...



    What will Apple do when Microsoft announces their version of a competing phone OS and hardware like they did with Zune, regardless of how much of a failure that was or not?
  • Reply 16 of 127
    trevctrevc Posts: 77member
    I certainly hope it's not true. Sure, Google is turning into a Microsoft, but just the thought of Jobs and Balmer in talks makes me cringe.



    Maybe they should use Yahoo? ;-)
  • Reply 17 of 127
    mark2005mark2005 Posts: 1,158member
    Quote:
    Originally Posted by AppleInsider View Post


    "Cozying up (to Microsoft) could bring more risk than reward, not least because it would clash with the Mac vs. PC campaign and the Apple brand identity that has coalesced around it," Reiner wrote.



    Uh, ever heard of Microsoft Office for the Mac? It's almost always on the front page of Shop Mac area of the online Apple Store.



    Reiner makes no sense. How would Bing clash with the Mac vs. PC campaign and the Apple brand identity, when Microsoft Office doesn't?
  • Reply 18 of 127
    If it's coming from an analyst, I have no doubt they feel that by starting this rumor, they can manipulate the stock market and get some free cash from Apple's stock... by shorting it Rinse and repeat.
  • Reply 19 of 127
    Haven't been all that pleased with my Bing dealings so far. Search engines all get you to the same place, but the subtle tweaks make all the difference.
  • Reply 20 of 127
    Yea, i think Apple should just stick to Google. Bing sucks, its not any different than the Live.com search. They just slapped a new name on it. Its still the same sucky search engine. Apple should stick with Google or make their own search engine.
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