

Hope You Enjoy the Smell of Napalm in the Morning (Apple vs. Google) - georgekv
http://daringfireball.net/2010/03/napalm_in_the_morning

======
symesc
What's interesting to me is how big a shift mobile represents to Apple's
strategy.

Gruber was first to convince me that Apple didn't care about the business that
Dell was in. Dell could have it. No margin.

Apple believed they built computers for the "elite" consumer who had taste or
money or both and wanted a premium experience. They played there because
that's where the margin is.

This situation (highlighted by iPhone vs. Android) is a stark departure for
Apple, and it probably illustrates one of two things:

1\. The competition is better, or 2\. The switching costs for phones is much
lower than for computers, and by costs I mean both money and the hassle of
migrating data and applications.

Google is doing an amazing job on both fronts. If the iPhone didn't exist,
Android would be the clear leader in this market. And when it comes to
switching costs, Google is eradicating them: I use Gmail, Google Calendar, and
Picasa. All work on both platforms very well. And I use Google Contacts as my
primary rolodex.

I don't use Mobile Me because Google provides the equivalent for free
(Google's services are probably better, really). Apple really doesn't have any
hooks into me.

If Google can deliver a compelling alternative to iTunes, I could move
tomorrow and the only costs I'd incur would be walking away from the $30 in
Apps I've purchased.

Compare that to my trying to move from OS X to Windows.

Apple is rightly terrified of Google.

And it probably gets worse when the Chrome OS hits the market.

I love love love my MacBook Pro and my iPhone. But increasingly they are
delivery vehicles for Google services. The irreplaceable part of that equation
is Google, primarily because I'm not interested in Microsoft's or Yahoo's or
Apple's alternatives.

~~~
blantonl
Sorry, but I see this as a very micro-focused example.

And my argument revolves around iTunes. The sheer amount of content that apple
has sold through iTunes would surely suggest that moving to another platform
would be a major barrier to transferring to another service.

As you said, Google indeed is doing a fantastic job on a lot of fronts. But
from what I see, in this "war" Apple is accomplishing a well executed flank
attack by controlling both the hardware and software platforms.

Apple will never get into the search business, but there are so many outliers
that many companies (Google, MS, Yahoo etc) have that Apple can out-flank and
simple dominate in the long term.

In addition, I'm convinced that Apple is sitting on the AppleTV since they
don't yet in their eyes have enough control over games, media content and
associated distribution. But, they are headed there, and I would expect that
the app Store will soon make it's way to the apple TV (and variants) platform.

~~~
jkincaid
"The sheer amount of content that apple has sold through iTunes would surely
suggest that moving to another platform would be a major barrier to
transferring to another service."

That will not continue to be true for long. The future of media consumption
(well, at least music consumption) is from streaming services, which don't
make you deal with syncing. iTunes may be user friendly, but the whole sync
process is still time consuming and frustrating. Also, all music that's been
sold on iTunes for over a year is DRM-free, and you can 'upgrade' your older
songs for a relatively modest fee if you want to.

There's an argument that video content (which is still laden with DRM) will
provide adequate lock-in, but that will probably start streaming too in the
next year or two. And I think it's less of a big deal to most people if they
can watch a TV show on their phone, anyway.

~~~
blantonl
_That will not continue to be true for long. The future of media consumption
(well, at least music consumption) is from streaming services, which don't
make you deal with syncing._

Fair, but remember that iTunes strength isn't their sync ability to their
associated devices, it is the already negotiated agreements with _content
providers_ who have agreed to distribute their content electronically.

~~~
ahk
Youtube is getting there in terms of content and is already there for music
videos.

------
Timothee
_"I can’t see Apple building its own search engine, but perhaps they really
are building their own maps service — hence their purchase of PlaceBase last
July."_

I found this paragraph towards the end interesting: I was thinking recently
about how it can sometimes be difficult for two guys in a garage to get
traction on their ideas/products, because to really leverage them you might
need a whole set of products around it. They're good ideas but would be _a
part_ of a big system that you can't build unless you're Google, Microsoft,
etc. (e.g. if you want to do something where you access the data of emails,
you need to piggyback on other companies' email systems)

So, I found this last part interesting because it puts Apple in a similar
situation as the two guys in their garage, at a larger scale, where they
(might) have to develop their own map service, where they have to get involved
more in online services (MobileMe), etc., even though it's not their core
competency[1]. The same way I would not use the two guys' product if it
doesn't work with my existing email account, some will get an Android phone
just because it integrates perfectly with their Gmail and Google Voice
account.

That's something Apple will need to focus on more IMO. We're heading towards
having everything _just_ online (pictures, documents, backups, music…) and
Google definitely has the advantage there.

[1] I'm not saying they don't know how to build online services. iTunes is a
proof that they do, but it doesn't (really) have an online front-end.

~~~
DenisM
It can also kill them - imperial overstretch.

------
raganwald
"Smart companies try to commoditize their products' complements."

\--Joel Spolsky, Strategy Letter V

<http://www.joelonsoftware.com/articles/StrategyLetterV.html>

Google is trying its damnedest to commoditize the smart phone business. It
would love for Apple, HTC, and everyone else to go down the same road PC
manufacturers went down and cut their own throats competing on price. Only
instead of taxing the manufacturers with a fat fee for each copy of Android,
they will make their money owning the advertising and search business.

~~~
pyre
Why does Google necessarily care of Apple drives the price of the iPhone down?
As long as Android phones can remain popular with low price points it will be
the same as the current desktop/laptop market. Apple prices their products
into a 'premium' space targeted at customers with more money while everyone
else competes on price. The high price of the iPhone doesn't necessarily
prevent a commoditized smart phone market.

I guess the question becomes: Why does Apple think that it needs to 'own' the
(smart) phone business to be successful? They've been able to remain popular
and profitable while keeping their products as a premium brand. Why does the
cellphone market need to be so much different?

~~~
andreyf
_Why does the cellphone market need to be so much different?_

Because Microsoft is making money selling software and commoditizing hardware,
while Google sees both software _and_ hardware as a compliment to their
business (and so, gives software away for free (hardware is commoditized
enough)). By comparison, Apple is trying to make profit off markup in
precisely those areas: hardware + software.

In short, the numbers are very different. While laptops are now split nicely
at $1000 (<1000 - mostly PC's, >1000 - mostly Macs), what we're talking about
is devices Apple wants to sell for $700 soon costing less than half of that
for similar "Android" manufacturers. I forget the marketing-speak explaining
this, but that gap is a big problem.

In summary, Google wants a world where both hardware and software are a
commodity. For Apple, this is bad, bad, _bad_ , as that's precisely the market
they're trying to make their markup.

------
ww520
It's interesting to see Google is stepping on lots people's toes: Apple
(phone), Microsoft (search/apps/mail), Facebook & Twitter (Buzz), Amazon
(AppEngine), Yahoo (the fake ad deal). Who else?

Sit back and pass the popcorn.

~~~
borism
what I'm worried the most about is that while the big boys play, MSFT will sit
and wait and then when everyone is weak enough the Borg will strike back and
Evil Empire will reemerge.

~~~
anigbrowl
That's what I thought about OS/2 :)

------
callmeed
_"But the situation has gotten past the usual level of competitive vigor"_

Really, how? And so what? I wouldn't want a mutual advisor or board member
either if I was Jobs/Schmidt.

Haven't there been rivals (even bitter rivals) since the dawn of capitalism?
As long as everyone fights legally/fairly, what's the problem?

When I did IT at a UPS call center, managers would take shots at FedEx at
least once a week in morning meetings (higher-ups were so pissed that FedEx
was in "Cast Away", it was hilarious). People switch sides and take better
jobs in any industry. Again, as long as there's no NDAs being violated, what's
the problem?

Is Apple out of line with the patent issue? Other than maybe that, I don't see
what's abnormal.

~~~
csmeder
>"But the situation has gotten past the usual level of competitive vigor"

>Really, how? And so what?

He gives specific examples in the article.

"I.e. it’s not particularly interesting that Apple hired Pittman, or that
Google lost him, but it is interesting that Apple poached a director from
Google, period. That didn’t use to happen."

"Mr. Campbell was forced to choose, and according to a person with knowledge
of the situation, he dropped his formal responsibilities at Google, although
he is still informally mentoring executives there." This is new, they have
never asked advisors to take sides.

In addition its not mentioned here but Jobs use to advise Sergey Brin. They
were friends and helped eachother. This is no longer true. This is new...

"[Sergey] Brin was also known to take long walks with Mr. Jobs near his house
in Palo Alto, and in the nearby foothills of the Santa Cruz Mountains.
According to colleagues, they discussed the future of technology and planned
some joint ventures that never came to fruition – like a collaborative effort
to develop a version of Apple’s Safari browser for Windows." \-
[http://www.nytimes.com/2010/03/14/technology/14brawl.html?pa...](http://www.nytimes.com/2010/03/14/technology/14brawl.html?pagewanted=1&src=tptw)

------
mcantelon
I'm thankful they agree on HTML 5 at any rate.

~~~
ZeroGravitas
I was just about to suggest that if Google wanted to shaft Apple then one good
way would be to introduce a royalty-free video format for HTML5 <video> that
Apple doesn't support in its OS, its browser or its iPods and iPhones.
Suddenly 130 million dollars for On2 doesn't seem that bad an investment.

(Obviously Apple _could_ adopt a royalty free format, but would they unless
forced to?)

~~~
bbatsell
How would Apple be shafted in this scenario? Sure, there are no On2 hardware
decoding chips in the iPhone, so battery life would suffer a bit, but... is
there anything more than that?

~~~
ZeroGravitas
Consider Flash vs Apple. There's nothing stopping Apple implementing Flash,
they just don't want to.

If Flash becomes indispensable for the mobile web Apple will be forced,
eventually, to support it. But up until that point (which may never come) that
it becomes inevitable, and probably for a long time after that point is
reached and Apple actually caves, all that Flash content will not be
accessible to users of iPhones or iPads, which reduces their value to
consumers compared with Android equivalents that do support Flash.

So the same as that, but with Google codecs and web content in them in place
of Flash, but worse because in this scenario Apple probably wouldn't support
them on the desktop either.

------
philwelch
Anyone else here remember the scenes from _Pirates of Silicon Valley_ where
Steve Jobs is shouting at Bill Gates about ripping off the Mac? A few years
from now I bet this will all make for a good sequel.

~~~
Herring
I'm sure the whole tech scene hopes so, but there are some important
differences this time around. I only know enough about law to realize it's
extremely complex.

------
jmtulloss
I haven't seen any evidence that Apple is poaching Google's employees. It's
quite possible that the employee in question approached Apple, not the other
way around.

~~~
hga
In this context "poaching" doesn't necessarily require Apple to have
approached him.

~~~
philwelch
In this context it does. The rumored agreement was that Apple and Google
couldn't recruit each other's employees but their employees could apply at the
other company if they wished.

~~~
pquerna
i've also heard it worded that they would not even /hire/ from each other, not
just recruit from each other.

~~~
hga
Yeah, that's a less strict usage of "poaching" that you'll sometimes see.

------
alexgartrell
I know there are like a million Google Employees here, what do you guys think
of the 'competition'? Is it real or just convenient?

Any Apple Employees?

~~~
anigbrowl
Well, I'm sure therms of employment preclude discussing such things publicly.
But it might explain why a fellow on the train was giving me dirty looks the
other evening while I was playing with a Nexus one. When he turned to get off
I noticed an Apple ID badge hanging from his belt.

Having said that, I saw probably 10 iPhone users in the same carriage, and as
yet they have no truly compelling reasons to switch.

------
donaldc
I'm going to guess that Apple is in the weaker (or at least more vulnerable)
position, given that it was the first to resort to lawsuits. I'm not sure they
really have an effective counter to Google entering the smartphone market.

~~~
mellis
Making better smartphones seems like a decent counter strategy.

~~~
donaldc
Obviously Apple needs to do that, or they're dead. But they do not appear to
be able to threaten Google's core business the way that Google is able to
threaten Apple's.

------
ZeroGravitas
Where is the "large phone" quote from? I heard it before but thought this was
Schmitt talking about Android tablets, not dissing the iPad?

I'm strangely pleased at how rattled Apple are (by this account at least).

~~~
houseabsolute
I agree, and I am pleased about it because I thought it was impossible.

------
Herring
> _We did not enter the search business, Jobs said. They entered the phone
> business. Make no mistake they want to kill the iPhone. We won’t let them,
> he says._

Looks like someone's still a bit touchy about microsoft.
[http://en.wikipedia.org/wiki/Apple_Computer,_Inc._v._Microso...](http://en.wikipedia.org/wiki/Apple_Computer,_Inc._v._Microsoft_Corporation)

~~~
bodhi
Except that Jobs wasn't at Apple between 1988-1994, when the lawsuit was in
progress. But maybe he still had some emotional investment in the matter? :)

~~~
philwelch
[http://www.folklore.org/StoryView.py?project=Macintosh&s...](http://www.folklore.org/StoryView.py?project=Macintosh&story=A_Rich_Neighbor_Named_Xerox.txt&characters=Bill%20Gates&sortOrder=Sort%20by%20Date&detail=medium)

Hmm...I think I might submit that.

EDIT: <http://news.ycombinator.com/item?id=1205911>

------
martythemaniak
Apple seems to be fighting a losing battle here. Google has a larger war chest
- that is more products which people find great value in, than Apple and they
are fighting on the side of openness which is more in the interests of users.
At the same time, I do appreciate the fact that Apple has instilled a sense of
aesthetics into the industry.

~~~
verisimilitude
While I can't disagree with your idea of aesthetics, I would argue that
Apple's entire product line is not about an aesthetic sense as much as a
design imperative. In promotional interviews for products (iPad, recent iMacs)
you'll find Ives repeatedly mentioning how many unnecessary elements he and
his team have _removed_ from products. This seems to be the ideal from which
their industrial design team works. Cf. Steve Jobs quote:

“Most people make the mistake of thinking design is what it looks like. People
think it’s this veneer — that the designers are handed this box and told,
‘Make it look good!’ That’s not what we think design is. It’s not just what it
looks like and feels like. Design is how it works.”

That quote was curated by Gruber:
[http://daringfireball.net/linked/2009/03/20/design-is-how-
it...](http://daringfireball.net/linked/2009/03/20/design-is-how-it-works)

------
aresant
"Hence the patent suit against HTC. That’s all about Google - about creating a
situation where Android is no longer a free operating system for handset
makers in the U.S., because the cost of using it is an expensive legal defense
against Apple."

Spot on.

~~~
dminor
I don't think other manufacturers really need to worry about it too much -- if
Apple sues another Android adopter, they'll basically force Google into suing
to protect Android.

~~~
Tycho
But what if Google lose? Interesting graph I found today:
[http://fortunebrainstormtech.files.wordpress.com/2010/03/scr...](http://fortunebrainstormtech.files.wordpress.com/2010/03/screen-
shot-2010-03-08-at-11-52-59-am.png)

~~~
barrkel
Interesting. It was like an arms buildup.

