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Apple vs Google - 106 Views
January 20, 2010
Tensions in Silicon Valley's special relationship began to emerge in late 2007, when Google announced plans to develop Android for mobile phones. Apple had unveiled its iPhone in January of that year, and it was clear that the two companies would spar in the smartphone business. Still, both were niche players, with more formidable rivals in companies like Nokia (NOK), Samsung, and Research In Motion (RIMM). Only after software developers began creating thousands of mobile apps, and it became clear that phones would become the computers of the future, did the conflicts begin to grow serious.
Apple has a substantial lead in establishing this ecosystem. Developers have created more than 125,000 mobile applications for Apple devices—seven times as many as exist on Android—and the endless diversity of apps has helped the iPhone quickly pick up 14% of smartphone share, compared with 3.5% for all the Android-powered devices put together, according to estimates by the market research firm IDC. Mobile search hasn't taken off. Gartner estimates that $924 million was spent on mobile search ads worldwide last year, less than 2% of overall Internet advertising. The problem is that user behavior isn't consistent between desktops and mobile devices. Many people shy away from calling up minuscule search bars on their phones and pecking out queries using cramped keyboards. Search ads tend to be less effective, too, since people are reluctant to give over the one browser screen they have on a phone to an ad. In many cases, apps are far more effective; it takes fewer steps to find the best local sushi joint using apps from Urbanspoon or Yelp than to type out "best local sushi" into a search bar and navigate the results. "Eric Schmidt has said that the search problem is 99% solved, but, boy, is that self-serving," says Jonathan Yarmis, research fellow with the consulting firm Ovum. "The fact that I have to go to a search bar at all is a sign of failure."
Visit Bloomberg BusinessWeek for full details
Bloomberg BusinessWeek, January 2010
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Apple vs Google - 106 Views
January 20, 2010
Tensions in Silicon Valley's special relationship began to emerge in late 2007, when Google announced plans to develop Android for mobile phones. Apple had unveiled its iPhone in January of that year, and it was clear that the two companies would spar in the smartphone business. Still, both were niche players, with more formidable rivals in companies like Nokia (NOK), Samsung, and Research In Motion (RIMM). Only after software developers began creating thousands of mobile apps, and it became clear that phones would become the computers of the future, did the conflicts begin to grow serious.
Apple has a substantial lead in establishing this ecosystem. Developers have created more than 125,000 mobile applications for Apple devices—seven times as many as exist on Android—and the endless diversity of apps has helped the iPhone quickly pick up 14% of smartphone share, compared with 3.5% for all the Android-powered devices put together, according to estimates by the market research firm IDC. Mobile search hasn't taken off. Gartner estimates that $924 million was spent on mobile search ads worldwide last year, less than 2% of overall Internet advertising. The problem is that user behavior isn't consistent between desktops and mobile devices. Many people shy away from calling up minuscule search bars on their phones and pecking out queries using cramped keyboards. Search ads tend to be less effective, too, since people are reluctant to give over the one browser screen they have on a phone to an ad. In many cases, apps are far more effective; it takes fewer steps to find the best local sushi joint using apps from Urbanspoon or Yelp than to type out "best local sushi" into a search bar and navigate the results. "Eric Schmidt has said that the search problem is 99% solved, but, boy, is that self-serving," says Jonathan Yarmis, research fellow with the consulting firm Ovum. "The fact that I have to go to a search bar at all is a sign of failure."
Visit Bloomberg BusinessWeek for full details
Bloomberg BusinessWeek, January 2010
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