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.