As Apple’s relationship with Google has soured in recent months, the situation has become so acrimonious that one unnamed Silicon Valley investor, described as “well-connected,” has observed: “It’s World War III. Amazing animosity is motivating two of the most powerful people in the industry, [Apple CEO Steve Jobs and Google CEO Eric Schmidt]. This is emotional. This is the biggest ego battle in history. It’s incendiary.”
He was one of two dozen people – including former and current employees at Apple and Google – interviewed for a New York Times article detailing how the two tech companies went from close friends to bitter rivals. Most of them did not want to be identified, for fear of retribution as the conflict intensifies.
One who was willing to have his name used was David B. Yoffie, a professor at Harvard Business School, who commented: “I’m sure it is going to get uglier. To beat Apple, Google is going to have to be very aggressive. If they are successful, it will put price pressure on Apple and the iPhone.”
The iPhone and Google’s rival Android mobile OS lie at the heart of the problem, according to people interviewed for the story. And it’s not just that the two companies are competing in the smartphone space: journalists Brad Stone and Miguel Helft observed: “Apple believes that devices like smartphones and tablets should have tightly controlled, proprietary standards … Google, on the other hand, wants smartphones to have open, nonproprietary platforms so users can freely roam the Web for apps that work on many devices.”
That difference has hallmarks of the decades-old Apple vs. Microsoft rivalry, although a Google spokeswoman and Mr. Schmidt both gave statements to the New York Times that spoke of nothing but respect for Apple, which declined to respond for the story. However, the article details private spats, including a 2008 meeting at Google during which Mr. Jobs threatened to sue if multi-touch appeared in Android; the discussion was described as “fierce” and “heated.”
Since last year, the rivalry between the companies has grown more intense. Last summer, Apple blocked Google Voice from the App Store, and Mr. Schmidt resigned from Apple’s board of directors. Last fall, Apple made a bid to acquire mobile advertising company AdMob, but when the 45-day “no shop” provision of the deal expired, Google snapped up the company with a sweeter offer than Apple’s. Apple responded by buying AdMob rival Quattro Wireless in January. Apple has also been rumored to be thinking of switching its preferred mobile search engine from Google to Microsoft’s Bing.
Recently, Google has said it will “stand behind” HTC in Apple’s lawsuit against the handset manufacturer, which makes Google’s flagship Android phone, the Nexus One. That phone has multi-touch capabilities, prompting a former Google executive to comment: “Google is not a company that is particularly afraid of anyone, including Apple.”
An Apple employee noted: “I’ve never seen anything quite like it in my life. I’m in so many meetings where so many potshots [against Google] are taken. It feels weird.”
The New York Times article has more details, including thoughts on whether Silicon Valley business counselor Bill Campbell, a former college football coach and former Intuit CEO who has counseled both Mr. Schmidt and Mr. Jobs, could negotiate a truce between the two companies.