Antitrust inquiry: How Apple and Google compete
Given the looming presence of Microsoft (MSFT) on the PC desktop, we tend to think of Apple (AAPL) and Google (GOOG) as corporate best friends united by a common enemy.
But the news Monday night that the U.S. government has opened an inquiry into the two companies' "interlocking directorates" under the Clayton Antitrust Act has prompted a fresh look at the extent to which Apple and Google are, in fact, competitors.
We assume, by the way, that the red flag that caught the attention of the Federal Trade Commission is Google CEO Eric Schmidt's seat on Apple's board, since the only other overlap is Arthur Levinson, former chief executive of Genentech (DNA), a gene-splicing company.
Schmidt is known to recuse himself from Apple board meetings when the iPhone is discussed. That makes sense. It wouldn't be fair for Google's team Android to get inside information about Apple's plans for future mobile devices.
But does Schmidt leave the room when Safari comes up? Or iTunes? Or MobileMe?
When you start to look at the hundreds of software products Apple and Google make — especially on the Web — things quickly get pretty complicated. Here's a partial list of the areas in which we know Apple and Google compete:
- Smartphone operating systems: iPhone vs. Android
- Web browsers: Safari vs. Chrome
- Music and video: iTunes vs. YouTube
- Cloud computing: MobileMe vs. iGoogle
- e-mail services: Mail vs. Gmail
- Address lists: Address Book vs. Contacts
- Calendars: iCal vs. Google Calendar
- Chat: iChat vs. Google Talk
- Photos: iPhoto vs. Picasa
- File storage: iDisk vs. Google Docs
There could be many more. If you spot any we've missed, put them in the comment stream and we'll add them here.
By the way, according to the New York Times, which broke this story, interlocking directorates rarely lead to major confrontations between companies and the government. It's easier just to ask the director or directors in question to resign from one board or the other.
Arthur Levinson's seats are probably safe.
I just want to reply to Jeff. People can use Safri (apples browser) and google can still make money through ads, because more then likly they are using google.
This sounds great to me! Just combine their apps/products that are not good on their own, spin-off ones that truly compete, continue as normal with the good ones that don't compete.
2. There are some "apps" or "products" that would get a lot better by consolidating into one, to become "the best of both worlds." Hopefully.
2. Achieve a critical mass for combined products that will make improvements economically feasible.
3. Stop wasting customers time with redundant versions that aren't good.
4. More apps/products can be made to sync/integrate with each other
5. It will accelerate the move of Apple programs to the Cloud (but still have offline versions/backups).
6. As more Apple programs move to the Cloud, customers will benefit by being able to access them from either platform (Mac or PC)
7. By eliminating redundancies, talented engineers and programmers will be freed up to work on something more useful.
The best example of this would be the lack of a multi touch screen on the Android phones.
Iphones have multi touch but Android phones have been designed to not allow multi touch input (even though the phone/screen is capable of it) making the screen on the Iphone far superior. Look it up.
Genentech, a "gene-splicing" company? Sheesh, I know it's a high-tech blog, but Genentech was pretty much the world's first biotech company with a long history of therapeutics (none of which are related to gene therapy). They single handedly created the SF biotech community.
This is kinda like calling Apple a peripherals company because their computers can work with peripherals.
ex ped: Alchemist, I think you are confusing gene splicing with gene therapy. Genentech is certainly a leader in therapeutics, but I will always think of it as a gene splicing company because it was co-founded by Herb Boyer, the scientist who discovered one of the key gene-splicing techniques — a method of combining genes from bacteria with genes from eukaryotes. Genentech was launched on the strength of the synthetic insulin and growth hormone Boyer produced using those new transgenic bacteria.
Safari uses WebKit. Chrome uses WebKit. They are based on the same open-source engine, whereas Firefox uses Gecko, which is a totally different open-source engine. This may not be common knowledge, but it's not a secret.
Recused or not, there is seeping stink of monopoly and a case against them.
Example:
StreetView panorama in Android/iPhone. The Apis, looks
like are proprietary and exchanged between only Google and Apple.
As a independent Android/iPhone developer, I can not seem to find how I can not decode the objects for the streetview panorama.
They don't compete in any way ,and if they united as one they would most definately give microsoft a scare.
"Its not really fair to put the Web Browsers in there as “competing”, its common knowledge that Google’s Chrome browser is based on Safari, so they aren’t competing as much as they are coexisting.
Posted By Adam, Plano, TX : May 6, 2009 1:46 pm "
That is not common knowledge. Googles Chrome is much more like Firefox than Safari. In fact a lot of the source code has been borrowed from Firefox since its open source.
You can log into Google Talk within iChat. Mail supports Gmail. You can export contacts to and from Address Book and Contacts. You can upload to Picaza from iPhoto. You can upload to YouTube from iMovie. Google Calendar is compatible with iCal.
And let's not forget Google does make some hardware; their search box. Which I don't think has any competition from anyone.
The idea of a merger put out by a previous commenter would be something serious to think about. Although, who would buy out who? I don't think Apple is interested in the vastness of Google, and I don't think Google is interested in dealing with hardware. However, I do think by their forces combined, they could put MS in their place.
"iTunes vs. YouTube
Cloud computing: MobileMe vs. iGoogle"
Both are not competitors to each other. Itunes is music/movies/tv shows paid and youtube is a public place to upload/stream personal videos.
igoogle is more of a personal page mobileme is a combined service of email,storage,gallery. If i recall correctly mobileme is shutting down its personal homepage system to.
Its not really fair to put the Web Browsers in there as "competing", its common knowledge that Google's Chrome browser is based on Safari, so they aren't competing as much as they are coexisting.
Apple has it own biz and Google has its own biz, I believe the only common thing they have is these two businesses can read consumers mind, and they reach there expectations, atleast they try to reach with new versions.
I can't really see competition when it comes to iTunes vs Youtube. For the most part the video content is completely different. One being free, and of questionable quality the other being paid and of high quality. The other point is if you look up a band video on youtube these days it often links to iTunes to purchase an album.
Has anyone considered the possibility of a merger between Apple & Google? They have really complementary products.
That would be a serious threat to Microsoft!
Elmer, can you look at this angle please in a future article?
Isn't the point of any antitrust action, the fear that collusion between Apple and Google may harm consumers? In each of the cases, PED cites, both Apple and Google are still in the minority. The only place where Apple is in the majority is in music, but Google doesn't compete with Apple in music. And, in video they don't compete. Apple is selling or renting commercial video, while Google isn't.
The point is no harm, no foul. As long as MS is in the majority in many of these categories, the DOJ should be looking there, first.
To say the apps are given away free is not the point. I never paid for IE or Netscape back in the early days. They were both always free…yet that didn't stop antitrust issues.
funny that the other commenters don't get how these two compete — every time someone uses Google and their Web browser to do one of these things (watch video, manage their calendar, manage their photos, etc.) they no longer need Apple (hardware and software). and vice versa. So no ad revenue for Google or no hardware revenue for Apple.
Kick Schmidt off of Apple's board — or put Steve on Google's.
Of the 10 areas the author lists as competing products, only the first two are of any importance. Of those the web browser used by Apple is a renamed copy of the open source WebKit. Apple spends virtually no time on Safari except for the interface.
APPLE & GOOGLE have different business models so i don't see any form of extreme competitive advantage where the two are concerned
Lame article. Go down the list of products and you will only find one where the two companies have any real competition, the iPhone/Android. Apple doesn't make any money off of their Mail, browser, address book, iChat, calendar, etc.
Even the smart phone issue is a bit weak. Apple makes their money off of the iPhone hardware and the deal with ATT, not the OS. Google may monitize the Android OS but it is probably less than 1% of their revenue.
The fact that Fortune thinks the companies are huge competitors says more about their lack of tech knowledge than anything.
ex ped: Straw horse alert. Who said anything about "huge"?
Interesting to see an analysis of Apple+Google, which together pretty much provide what Microsoft provides built on its Windows/Office monopoly.
"Apple has no intention of killing off competition? Apple fanbois… Pull the wool over coppertop!"
MSFT actually STATED in internal documents that they were trying to kill Netscape. If similar documents exist within Google or Apple, they have yet to come to light. Moreover, who is Apple TRYING to kill? MSFT? They are doing a pretty good job of that themselves. Nokia/LG/HTC/RIMM/Palm? They had PLENTY of time to try to make decent phones before Apple stepped in.
It's kind of silly to call Apple and Google competitors.
Apple's business is selling hardware. Google's business is selling ads.
It's like saying that Panasonic and NBC are competitors.
What took them so long? He has been on Apple's board since 2006.
If Apple invited him to be on board, there must be reasons.
Okay, I'll give you the iPhone, Safari and iPhoto as areas where Google and Apple overlap. I'll even give you Mail, Address Book and iCal (though without MobileMe, they don't have the same functionality as Google's products).
However, I think it's a serious stretch to compare iTunes to YouTube. And iDisk and Google Docs are almost as different. At least iChat and Google Talk serve the same function, but they're still fairly different in execution.
That's a bit of a stretch to say that youtube and iTunes are competing platforms. I really don't many similarities at all, except you can watch videos on both, but even then the quality is not similiar.
Much ado about nothing. Most of the products you mention are given away FREE– and not with the intention of killing off the competition (which was MSFT's stated goal when they launched Internet Explorer– to hurt Netscape, Inc.)
"The enemy of my enemy is my friend"