Linked by Thom Holwerda on Fri 21st Oct 2011 23:17 UTC, submitted by jello
Apple So, how serious is the legal battle between Apple and the various Android phone makers, really? Surely, it's just logical business sense that's behind it, right? Calculated, well-planned precision strikes designed to hurt Android where simply making better, more innovative products isn't enough? Well, no, not really. We already knew Steve Jobs took this personal - now we know just how personal.
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To summarise
by Tony Swash on Sun 23rd Oct 2011 11:36 UTC
Tony Swash
Member since:

I will try to summarise the position.

By the early 2000's Apple made it clear it wanted, and offered, a close alliance to Google. It offered a place on it's board to Google's CEO and it baked in Google services into the new mobile OS it was working on. Google seems to accept the alliance. The relationship between the two companies is very good.

Google is not privy to Apple's iOS and was primarily worried that the disruptive technology in the coming smart phone revolution will be Windows Mobile OS. Google can see a shift to internet via mobile devices coming and is worried that if something like the Microsoft OS wins in the mobile space it will shut out Google's revenue earning services. If Microsoft mobile had won the mobile OS war this indeed is what would have happened. Google buys the Android team in 2005.

The new Android team start to build a mobile OS. From all released information about the Android development the OS the being built is very similar to Windows Mobile and RIM, i.e menus, not touch drive, hardware keyboard.

Microsoft's strategy is to commoditise handset hardware and take the bulk of revenue in the mobile space via OS licence fees exactly as it did in the desktop market. Google's strategic aim with Android is to outflank Microsoft's strategy by reducing the value of the mobile OS to zero, commoditise handset hardware and to take the bulk of revenue in the mobile space via baked in Google services.

Apple announces the iPhone including iOS version one in January 2007. On release in June of 2007 it is immediately clear that the iPhone is smash hit and it becomes very clear very quickly that the iPhone is an inflection point in the world of the mobile device and mobile operating systems. Windows Mobile OS strategy is now clearly dead and will require a major reset and RIM is not going anywhere.

The Android team switch track and build Android to look and operate like iOS. As a result Android will now to seek to reduce the value of Apple's iOS to zero and to commoditise the iPhones. It is not clear (and is a very interesting questions) as to whether the decision to switch the target of Android from Win Mobile to targeting Apple's OS is made at a high strategic level. Given Google's internal management style (i.e a great deal of autonomy for teams and for project development, Andy Rubin has been quoted as saying 'they just left me to get on with it') it is possible that the long term implications for Google's relationship with Apple were not thought about deeply when the switch to attacking Apple's mobile revenue model was taken.

By 2009 it is clear that the released versions of Android are directly emulating and competing with Apple's iOS. Eric Schmidt the Google CEO resigns from Apple's board. Apple continue to build Google's services into it's iOS but initially make no public attack on Google. At the Google IO conference in 2010 there are many explicit attacks on Apple. In it's autumn earning call Steve Jobs make a very strong attack on Google. The Apple Google alliance is in tatters.

Android is a huge success but is disappointing in terms of Google services access and revenue. Google search on iOS, where for the time being it remains the default search engine, generates two thirds of Googles revenue in mobile. Google's revenue in mobile remains at a much lower level per device compared to per desktop/laptop. Android has not yet safe guarded Google's service revenue in the new internet via mobile device paradigm. iOS continues to sell very well across a spread of devices including tablets and iPods.

Apple continue to make the most profit in the mobile arena by far and Apple's iOS device sales continue to grow very strongly. Android sales in handsets exceed Apple's in numbers but do not generate big profits for most handset makers. Android in tablets fails to dent the iPads market dominance.

Apple buy Siri and with it's release it clearly shows the potential for a new way to search for information that can bypass Google. Apple buy several mapping companies and it is presumed will have a new mapping system in place soon that will bypass Google maps.

The war between Google and Apple has only just begun, will it be like the first world war with a prolonged war of attrition and few clear cut victories as both take large revenues from the mobile arena? Will Google's Android strategy be like Germany's invasion of France - a successful blitzkrieg leading to total victory with Google securing the bulk of the revenue in new mobile services? Or will Google's Android strategy be more like Germany's invasion of Russia, stunning early successes, and then crushed by counterattack with Google being excluded from the bulk of mobile revenues?

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