Why Google is a Better Apple Friend than Enemy

A casual observer might be forgiven for thinking that to Apple, Google is Enemy #1. Apple’s most profitable (and therefore important) businesses center on the iPhone and iPad. The most serious competitors in both these product categories run on Google’s Android platform.

The belief that Google is the enemy makes intuitive sense on two counts. First, when you, the gadget-happy user, chooses a device, you may consider an iPhone or an Android device side-by-side. Clearly, you’re choosing between them, and Apple and Google are competing against each other for your business. Likewise for a tablet.

Second, we’ve all been trained to think of technology platforms as the main battlefield for industry control and dominance. Long-time Apple fans still feel the burn of the Windows-Mac wars, which in fact continue to this day.

But this user perspective masks the business reality, which is that there is far less head-to-head competition between Apple and Google than you might think.

The “resources” in question are sources of revenue. Apple makes its money by selling integrated hardware-software products, and also from the service of facilitating content distribution (they get a third of the money you spend on iOS apps, for example). Apple also sells software. A very tiny percentage of Apple’s revenues comes from advertising.

Google, on the other hand, makes about 97 percent of its revenue from advertising. The company makes essentially nothing from hardware, relatively little from app distribution, hardly anything from software.

Apple is a consumer electronics company. Google is an advertising company.

Famously, Apple’s iOS is “closed” if you’re a hater or “integrated” if you’re a fanboi. Google’s Android is “fragmented” if you’re a hater or “open” if you’re a fanboi. It’s been fun to watch Steve Jobs and Eric Schmidt trade barbs over which is the superior model. But ultimately the debate is pointless. There has always been and will always be “integrated” and “open” alternatives, and each has its benefits, problems, fans and detractors.

Delusional advocates for one side or the other act as if one company is the only thing keeping the other model alive. It’s as if Google suddenly vanished, there would only be “integrated” cell phones, or if Apple went away, we’d all live in a free and open technology Shangri La. In fact, they are two different worlds with two different groups of fans.

Apple dominates one. Google dominates the other.

Some company is always going to lead the “integrated” camp, and some other company is going to dominate the “open” approach. If Google wasn’t there with Android, some other company would be doing more or less the same thing with another variant of Linux. If Apple didn’t rule the “integrated” market, some other company would.

And Google is the ideal company to dominate the “open” mobile universe. In the future, the vast majority of phone and tablet users will probably use Android-based devices. And the vast majority of phone and tablet profits will go to Apple. And this state of affairs is perfectly desirable to both Apple and Google.

Apple has no interest in being the mainstream gadget maker for the masses. They want only the high-end, high-margin segment of the market, and are happy to cede the mass market (driven by low price over design elegance) to other companies.

Google’s model will drive hardware and software margins right down to zero, while that company rakes in big bucks from advertising. Google loves low hardware margins because Google doesn’t make hardware. Those low margins, however, drive high user numbers, which delivers more Google services and the advertising that supports it.

Apple wants nothing to do with low-margin hardware businesses, so who cares if companies that use Google Android get it all?

Meanwhile, RIM, HP (with Palm) and other companies are, in fact, direct rivals and competitors to Apple. They’re trying to survive in Apple’s pond, consuming the same resources (integrated hardware-software revenue) as their primary business.

Don’t get me wrong. There is some direct competition between Apple and Google. But the business overlap is far smaller than most people imagine it to be. More importantly, Google provides far more benefits to Apple than it does challenges.

For example, Google makes an outsized contribution to the overall iPhone experience.

In my own case, my main iPhone home screen is where I keep some of the better Google apps. I use Maps, for example, several times a day. I can barely find the bathroom in my own house without it.

I love Latitude for keeping track of my family’s whereabouts.

I’m a Google+ freak, and obsess over the G+ app whenever I’m away from my desk.

And have you tried the Google Search app? It’s one of the most amazing apps you can get for the iPhone. Talk to search. You can take a picture of something in a foreign language and it translates it for you. You conduct searches on things by taking pictures of them. It’s science fiction, and works beautifully. The Google Search app is the iPhone experience at its best.

If I had to choose between the Google apps on my iPhone — Maps, Latitude, G+ Search, Gmail — and the Apple apps — Calculator, Notes, Stocks, Weather, Contacts, etc., I wouldn’t hesitate to choose the Google apps. The iPhone experience would be greatly diminished without Google’s contributions.

You can’t really say the same thing about the iPad environment. Apple’s office apps and a few others are probably more useful than Google’s iPad apps, overall. Still, Google’s contribution to the thrill of using an iPad is significant.

Google Earth for iPad is probably one of the top three iPad apps ever built, in my opinion.

Google recently re-configured their Search product to detect tablets, and offer a tablet-friendly version that works great on the iPad.

Of course, every single one of these Google apps for both iPhone and iPad is free.

As in so many other products and services, Google could have opted to turn its awesome services into advantages for Android. Imagine if only Android had Maps, Earth, Gmail, the Search app, Google+ and others.

But because their models are so different — Google just wants to sell ads — Google is happy to make iOS apps and services every bit as good on iPhone as they are on Android.

There’s an old proverb that says: “The enemy of my enemy is my friend.” Apple and Google have a lot of enemies — OK, business rivals — in common.

In a way, these two companies function as a kind of “Silicon Valley, Inc.” that competes almost as a unit against other rivals. Apple and Google breath the same air, figuratively speaking, and are driven by the same cultural engine of awesomeness that is Silicon Valley.

Together they have been clobbering the other respective “integrated” and “open” models from elsewhere. The mobile universe used to be dominated by Canada and Finland. But now RIM and Nokia — two companies on opposite sides of the planet — are being crushed by two companies whose global headquarters are within ten miles of each other.

Both Apple and Google compete against Microsoft and Amazon — call it “Seattle, Inc.” — on the most core parts of each of their businesses.

Both Apple and Google compete against — and together represent the most successful challenge to — the rise of Asia as a consumer technology powerhouse. Call it “Asia, Inc.” In fact, if Apple and Google falter, we could all be using Chinese search engines and Koreans phones in ten years. But so far, Silicon Valley, Inc., is holding its own.

There are many other areas where Apple and Google are likely to partner in the future. Both have a strong interest in advocating patent reform, for example, something desperately needed.

And Google’s core objectives are far more in line with Apple’s than even some of Apple’s closest business partners. For example, while AT&T is looking for ways to throttle bandwidth — dashing hope, for example, that we’ll ever get FaceTime or Google+ Hangouts over mobile broadband networks — Google is dropping huge coin on maximizing bandwidth with its Google Fiber for Communities project. No, that’s not wireless. But the point is the strategic interests of both Apple and Google are served by users with low-cost access to a lot more bandwidth, while AT&T’s apparent interest lies in limiting and blocking bandwidth-hogging mobile services.

It’s fun to watch the competitive rivalries in technology. We all like to champion our favorite platform, whether it’s iOS or Android. But from Apple’s business perspective, Google represents far more of a friend than an enemy.

(Picture courtesy of Gizmodo)

Mike Elgan

Mike Elgan writes about technology and culture for a wide variety of publications. Follow Mike on Google+, Facebook and Twitter.