Press "Enter" to skip to content

Apple beefs up smartphone services in “silent war” against Google


Enlarge / Apple allegedly still holds a ‘grudge’ against Google ever since co-founder Steve Jobs called its rival Android operating system a “stolen product.”
FT montage/Reuters

Apple is taking steps to separate its mobile operating system from features offered by Google parent Alphabet, making advances around maps, search and advertising that has created a collision course between the Big Tech companies.

The two Silicon Valley giants have been rivals in the smartphone market since Google acquired and popularized the Android operating system in the 2000s.

Apple co-founder Steve Jobs called Android “a stolen product” that mimicked Apple’s iOS mobile software, then declared “thermonuclear war” on Google, ousting the search company’s then-CEO Eric Schmidt from the Apple board of directors in 2009.

While the rivalry has been less noisy since, two former Apple engineers said the iPhone maker has held a “grudge” against Google ever since.

One of these people said Apple is still engaged in a “silent war” against its arch-rival. It is doing so by developing features that could allow the iPhone-maker to further separate its products from services offered by Google. Apple did not respond to requests for comment.

The first front of this battle is mapping, which started in 2012 when Apple released Maps, displacing its Google rival as a pre-downloaded app.

The move was supposed to be a shining moment for Apple’s software prowess but the launch was so buggy—some bridges, for example, appeared deformed and sank into oceans—that chief executive Tim Cook said he was “extremely sorry for the frustration this has caused our customers.”

Just came in:  Apple could introduce a pricier iPhone ‘Ua’ in 2024

Apple’s Maps has improved considerably in the past decade, however. Earlier this month it announced Business Connect, a feature that lets companies claim their digital location so they can interact with users, display photos and offer promotions.

This is a direct challenge to Google Maps, which partners with recommendations platform Yelp to offer similar information and makes revenues from advertising and referral fees.

Business Connect goes further by taking advantage of Apple’s operating system to give iOS users unique features, such as seamless integration with Apple Pay or Business Chat, a text-based conversation tool for commerce.

“Apple is very well positioned to decouple from Google more and more, largely under the guise of consumer privacy,” said Cory Munchbach, chief executive of BlueConic, a customer data platform.

The second front in the battle is search. While Apple rarely discusses products while in development, the company has long worked on a feature known internally as “Apple Search,” a tool that facilitates “billions of searches” per day, according to employees on the project.

Apple’s search team dates back to at least 2013, when it acquired Topsy Labs, a start-up that had indexed Twitter to enable searches and analytics. The technology is used every time an iPhone user asks Apple’s voice assistant Siri for information, types queries from the home screen, or uses the Mac’s “Spotlight” search feature.

Apple’s search offering was augmented with the 2019 purchase of Laserlike, an artificial intelligence start-up founded by former Google engineers that had described its mission as delivering “high quality information and diverse perspectives on any topic from the entire web.”

Just came in:  MagSafe cases are coming for our Android phones; bring them on!

Josh Koenig, chief strategy officer at Pantheon, a website operations platform, said Apple could quickly take a bite out of Google’s 92 percent share of the search market by not making Google the default setting for 1.2 billion iPhone users.

“If Apple could build something that was essentially as good as ‘Google classic’—Google circa 2010 when it was a simple search engine less optimized for ads revenue—people might just prefer that,” Koenig said.

That would be expensive, however. Alphabet pays Apple between $8 billion to $12 billion a year for Google to be the default search engine on iOS, according to the US Justice Department.

Still, displacing Google on the iPhone, and assuring users their web queries will not leak to third-party data brokers, would align well with Apple’s privacy-centric software changes and marketing campaign—while potentially delivering a huge hit to Google’s business.

Since it launched a new privacy policy in April 2021 that deprived companies like Facebook and Snap from easily building user profiles and tracking their actions from app to app, shares in those companies have collapsed by 58 percent and 84 percent, respectively.

“Google could still be a better search engine, but if I want to search for me potentially getting cancer, who would you rather have that information?” said Anshu Sharma, CEO of data privacy platform Skyflow.

The third front in Apple’s battle could prove the most devastating: its ambitions in online advertising, where Alphabet makes more than 80 percent of its revenues.

Last summer, Apple posted a position on its job pages that it was looking for someone to “drive the design of the most privacy-forward, sophisticated demand side platform possible.” A DSP is a digital media buying tool that lets advertisers purchase ad inventory on multiple exchanges.

Just came in:  Why Meme Coin Prices Had a 7-Day Pump and Tamadoge is Today's Best Performer, Up 10% to $0.022

The job ad was an indication Apple wants to build a novel ad network, one that would reshape how ads are delivered to iPhone users and keep third-party data brokers out of the loop.

The role was filled in September by Keith Weisburg as group product manager of Ad Platforms. Weisburg, who also spent a decade at Google and YouTube, had been a senior product manager for Amazon’s DSP.

Apple’s move on three fronts has left Alphabet’s position within iOS looking “more vulnerable than it ever has been before,” said Andrew Lipsman, analyst at Insider Intelligence.

“Apple is increasingly incentivised to get into the search business as it builds out its advertising arm,” he said. “Search is the key to huge troves of first-party data, and that’s the new battleground for the future of digital advertising.”

© 2023 The Financial Times Ltd. All rights reserved. Not to be redistributed, copied, or modified in any way.