Today’s announcement that Google CEO Eric Schmidt has resigned from Apple’s board of directors may change the very face of competition in a race long alleged to be between Google and Microsoft.
The mutual decision–so far as the friendly PR tells us–to step down from Apple’s board comes just days after the FCC was prompted to investigate Apple’s app store practices after the firm rejected Google’s Voice application.
The timing of the announcement carries the air of conspicuousness, but cannot be construed as definitively damning. The more interesting case to be made from Schmidt’s resignation is the cementing of a rivalry few–if anyone–saw coming amidst the Microsoft v. Google punditry: Apple may just be Google’s biggest rival, not Microsoft.
Consider the market overlap between the trio of tech elites: While Microsoft and Google compete in search, advertising, cloud computing and soon operating systems, Google and Apple compete in phones, browsers, cloud computing and soon operating systems. Google may share the same number of conflicts with both firms, but the numbers tell a vastly more interesting story.
The operating system
NPD reports for the operating system market in 2008 reveal a 40% drop in sales. As Microsoft controls 93% of the OS market, the precipitous decline rests almost entirely on their shoulders. Apple, which uses OS X to support the core hardware business, escapes relatively unscathed. Google, meanwhile, takes no damage as ChromeOS remains unavailable.
Real competitors: Microsoft and Apple
Why: ChromeOS is unavailable and it is not slated to present the complete desktop experience offered by OS X and Apple. Even the uninitiated can see that Google is not attempting to play at that level; that means the real competition defaults to our familiar heavyweights.
Like it or not, cloud computing is coming. Google, Flickr, Facebook, Twitter, Mint and others have already proven that people are more than willing to store their identities, creations, thoughts and finances on the Internet.
The numbers don’t lie: Gartner reports that revenues from cloud computing rose 21% to $56.3 billion in 2009. Given that the market is so explosive, how has each company moved to react?
Google, the perennial front-runner, practically pioneered the consumer cloud with Google Docs, Mail, Calendar, Maps and Sync that keep a consumer’s bevy of devices on the same page. Using Gmail is as transparent to most as the morning cup of coffee.
Apple’s MobileMe product suffered some early setbacks, but has panned out to critical acclaim (as most Apple things do). It has the added prestige of being the first consumer-oriented cloud syncing system to launch alongside traditional hardware and software products.
Speaking of Microsoft, have you heard of Windows Azure or Live Mesh recently? No? We haven’t either. Microsoft’s cloud initiatives for the enterprise and consumer, respectively, are mere afterthoughts from a company that has repeatedly snubbed the cloud. To wit, a group of Microsoft execs once expressed the hope that cloud computing was a fad.
Real competitors: Google and Apple
Why: Google’s cloud services are a household name, and Apple has successfully launched a profitable consumer cloud synchronization package. Microsoft isn’t even in the same league.
If cloud computing is the future, then that eventually makes the browser the new operating system. Based on that reasonable assumption, it can be argued that companies with the largest say in the implementation and presentation of web standards will make the largest gains.
Google is another winner in this arena for several reasons: It is a little known fact that Firefox’s creator–the Mozilla Foundation–derives 91% of its revenue from Google. This would not be significant except for the fact that Firefox will gain a majority share of the browser market by 2013 if the trends continue.
Google’s browser involvement also extends to its August, 2008 launch of the Chrome browser. While Chrome is by no means a major player, owning just 2.59% of the market, that 2.59% yearly growth is second only to Firefox. Chrome is slowly but surely going places.
It is clear that Google will soon master the Internet’s presentation, but it exerts an even larger influence on its standards. Some fear that Google’s shadow is so long that mere experiments with browser features could easily be adopted as web standards.
“But experimental features often appear in new browser releases first, then are integrated into the official standards later,” writes Neil McAllister for PC World. “One example is Google’s Gears technology, which is built into Chrome and is available as a plug-in for Firefox and Internet Explorer. Gears is widely expected to influence the upcoming HTML 5 standard.”
Apple, meanwhile, is no slouch in the standards department either. The firm is the primary overseer of the WebKit rendering engine that lies at the heart of the iPhone, Palm Pre, Chrome, Android and Safari browsers. WebKit and Apple play such a large role in the standards process that the company almost unilaterally altered a major portion of the HTML5 spec.
Off the desktop, WebKit continues to dominate. The iPhone alone is the number one smartphone, and the smartphone market–though slowing–continues to grow year-over-year. This means that Apple holds a majority share in the way the Internet is presented to mobile users, just like Google will soon hold the majority share in the way the Internet is presented to desktop users.
It’s easy to say that the Redmond, WA company has never been more confused about its role in the standards game.
Microsoft impressed even the most jaded web gurus when it launched its first-ever standards-compliant browser, Internet Explorer 8. But was IE8 a sign that Microsoft was ready to participate? On the contrary, the firm has repeatedly shown a continuing disinterest in implementing or assisting the HTML5 or CSS3 projects.
In many ways, Microsoft’s majority share in the browser market has long been the biggest obstacle in arriving on a set of universal rules for web development.
“The largest perceived obstacle to any reform of web standards is a big question mark surrounding Microsoft,” writes web developer James Bennett.
“Though a member of the W3C and a participant in various working groups, Microsoft’s implementations of the resulting standards have ranged from lackluster to laughable and this, combined with Internet Explorer’s dominant market share in the browser world, naturally leads to a concern that any effort which doesn’t have a firm commitment from Microsoft will inevitably fail.”
You might recall that Firefox’s growth rate will make it the 51% leader in the browser market by 2013. If that’s so, it will do so only by cannibalizing IE’s market share which once towered at 90% or more. If Microsoft loses its majority share, it will have not only willingly relinquished control of the standards process, but forfeited its ability to force a standard onto the market with IE as it once did with Internet Explorer 6.
Real competitors: Google and Apple
Why: Microsoft has volunteered for its one-way ticket into browser obscurity. If Redmond continues to write itself out of the picture, Apple and Google are the lone titans left to wage the browser war.
As we previously covered, the smartphone market continues its upward trend against all the odds presented by a depressed market. This falls in line with old prophecies which predicted that the mobile phone would eventually rival the desktop for Internet consumption; some have even called it the seventh mass media. So where do our players stand?
Though the company produces no actual hardware, it has developed the Android operating system which any carrier or manufacturer can adopt for its own devices. The brilliance of this strategy is slowly panning out as it spreads to products from the likes of HTC, Samsung, Asus, Dell, Sharp, Nokia, Motorola, Lenovo and Archos.
Android’s focus is on the cloud: The entire range of Google’s services (Gmail, Docs, Calendar and more) can synchronize with an Android phone just as easily as any desktop. And it’s a strategy that clearly works, as it has attracted major movers and shakers in the industry with big profits and big ambitions.
The iPhone is the technological equivalent of the immigrant that realized the American dream. Apple approached a market virtually dominated by RIM and Microsoft in the west and Symbian in the east, and in just two short years it became the number one smartphone in the industry.
Not bad for a company that had no OS, no hardware, no carrier contracts, and no experience prior to launch. And how about the app store, which has become an ubiquitous feature of any smartphone platform? Yeah, Apple invented that idea for the iPhone.
In every way, Apple is slowly wrestling this market into a shiny-gloved stranglehold.
Once upon a time, Microsoft’s Windows Mobile was the only major smartphone platform in the west. But through a series of stumbles including typical Microsoft stubbornness, protracted development periods and missed launches, it has fallen to a distant and ugly third.
Windows analyst Paul Thurrott once said it best:
“So where does all this leave Windows Mobile? Yes, there are decent-looking devices out there, and more are on the way. But the interface itself hasn’t changed much over the years and won’t for at least another year and a half. That’s a long time to wait when your competitors are moving more rapidly than ever and with more interesting products than ever. Microsoft’s management solution expertise will keep things from collapsing for a short time, but the company needs to take dramatic steps to make Windows Mobile more viable going forward. And I just don’t see that happening.”
Real competitors: Google and Apple
Why: Microsoft has let its mobile presence languish, and in so doing has let a new generation of better, snazzier, more robust players take its place. Google and Apple are the newest generation, and they offer more opportunities for development and growth than ever.
Bringing it all together
People are turning to the Internet to consume, be entertained, learn and connect in increasing numbers. In truth, it’s a destiny that governments across the globe are working to accelerate with infrastructure spending designed to bring the Internet to ever larger populations.
From standardization, to delivery and to presentation, Apple and Google are central to the medium that will soon be the undisputed champion of global recreational time. If this is the metric by which we measure competition, Microsoft is no threat to Google at all.