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Apple v Google, not quite a death match

18 January 2011

Robert Lane Greene has written a sparkling account in Intelligent Life of the growing rivalry between Google and Apple. For years Steve Jobs was an inspiration to Larry Page and Sergey Brin, and, Eric Schmidt sat amicably on Apple’s board until 2009. As Greene puts it, ‘the companies could have been a match made in heaven: Apple’s gorgeous devices running Google’s miraculous services.’ But when Google launched Android and challenged the iPhone in the glittering smartphone market , they became serious rivals and now compete on several fronts: operating systems, browsers, email, photos, app stores, cloud computing, even books and music. (Though not exactly ferociously.)

Greene is particularly good on what he calls the clash of cultures. The key to understanding Steve Jobs, he suggests, is that calligraphy was the most important course he took in his brief time at college. Design is Apple’s supreme value and Jobs has always been a perfectionist, obsessed with getting every tiny detail exactly right. His colleagues used to moan about his reality distortion field. Now that he’s a god, they simply venerate him. Google on the other hand is a ‘herky-jerky place’, where engineers experiment endlessly, happy to put out beta products that often fail. According to Eric Schmidt, ‘the Apple view is coherently closed. Ours is the inverse model: the web, openness, all the choices, all the voices.’

Yes, but they’re doing very different things. You don’t produce beautiful objects like the iPad and the iPhone through open source, nor is Google simply a mouthpiece for the wisdom of crowds, any more than YouTube is merely a platform for other people’s videos. Apple and Google are only competing obliquely, and their cultures and values have far more in common than what separates them.

They are the shining exceptions to the general rule that, as companies become large incumbents, they lose the ability to produce really radical innovations. Apple and Google are exceptional even by the standards of start-ups, way ahead of the field, and able to attract and inspire the most talented people. They are still driven by the visions that inspired them from the start, much more than by how to keep Wall Street happy. They also greatly respect each other. Schmidt recently called Jobs ‘the best CEO in the world by any measure.’

This is more a contrast of cultures than a clash and it’s a long way from being a ‘death match’, closer to Federer v Nadal than Achilles v Hector. Whoever wins – if there is one winner – won’t be dragging the mangled remains of the other through the dirt. Android is well on the way to becoming the most popular operating system, but iPhone users are likely to retain a significant market share, like RIM’s Blackberry. The crucial difference from the PC world of the late 1980s is that Apple will not be cut off from the mainstream in the way that it was when Wintel became dominant.

There could only be an outright, dominant winner in the smartphone market if one player enjoyed enormous network effects or switching costs. That isn’t yet the case and John Gapper has made a strong case for suspecting that it may never happen. Greene makes much of the fact that ‘there is no easy way out of Apple’s system . . . Apple’s offerings hardly ever let you down, but when they do, you are stuffed, left with sunk costs and a reputation as an Appleist that you would publicly have to disavow.’ But this is not lock-in in the way that most businesses are still stuck with Windows and Office, because the cost of switching would be prohibitively high. Appleists have chosen to be different and put up with inconveniences like iPods dying young, as they used to rather frequently, because they simply adore them. Some aspects of the cult may be ridiculous, but this is true love. Brands don’t get any better than that.

Neither of these two have serious rivals in their core domains. Despite disrupting just about every part of the media industry, the only adversary Google has seriously sought to displace is that master of customer lock-in, Microsoft. Apple has long learned to coexist with the old enemy – for years Microsoft was its most important software developer and even now Office for Mac remains crucial for its credibility as an alternative to the PC. Surpassing Microsoft’s market cap must have brought enormous satisfaction to Steve Jobs, but right now he has more important things on his mind.

We can be sure that Schmidt, Page and Brin wish him well. As we all do.

3 comments to Apple v Google, not quite a death match

  • Great analysis.

    The test and fail is particularly interesting to myself. I find that failing only makes people stronger. 37 signals don’t agree but the few books that i have read from hugely successful people and businesses all seem to have learned heavily from their failures.

    Also a little off topic but i read a great article of business and having three areas. Basically not to reply on single independent product. The article pointed to Job’s WCI talk a few years where he spoke of it himself with Apples Mac, Ipod and Iphone.

    I was actually thinking to myself earlier this morning for all Apple’s negative points with closure, they don’t half make great products, which in my opinion outweigh the downsides.

    Great post keep them coming.

  • One view could be that these firms’ success has much to do with being led by engineers – and of course one has to access the pitfalls that could have destroyed them that they one way or another avoided.
    Another view is that Apple especially is not only engineering but design-led, as Kieran Levis rightly emphasises.
    A third view is that while their products have great use and appeal to corporate market they really won out in the consumer market. Had they like other IT companies only focused on business customers design would have mattered less and brand identity never reached such dizzying heights.
    Bloomberg, for example, is a strong success, but whose design qualities are limited, more closed than open-source, and could have addressed the consumer market years ago and still hasn’t really bothered.
    While Apple has been brilliant in moving latterly into hot consumer products, much of which heat it has generated, it has not yet addressed the web of the cloud-computing and what could become an Apple search universe within the wider www.
    Both Google and Apple are fortunate in being relatively free of virus pollution in their own systems, and thereby also free of a myriad of add-on enhancement providers, leaving enhancements very much to their own business benefit.
    But where Google is a general search facility (which will look increasingly restricted and primitive in another few years unless dramatically enhanced) it is really an advertising media, while Apple is also a search and presentation provider but one based very deeply in dedicated product and service focus that allows for a very distinctive and unique design identity.
    Google succeeds as a utility of necessity, but Apple succeeds by being loved.

  • Nice post Kieran. Who knows how these two will clash or combine in the future? They both enjoy enormous respect as brands and share similar values of innovation and accessibility. They have radically different business models from their conventional competitors too. Where they differ from each other is in how they realise their design skills. Apple makes great new products and Google excellent new services. Keeping to these core competences will avoid full scale war.

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