Silicon Valley Source: Apple vs. Google is ‘World War III’

| News

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.

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11 Comments Leave Your Own

bearcatrp

Its about time apple gets spanked. Keep things in perspective. Otherwise, apple will become the next ruthless microsoft. Besides, competition is very good to bring out the next great thing.

Jonesy

Its about time apple gets spanked. Keep things in perspective. Otherwise, apple will become the next ruthless microsoft. Besides, competition is very good to bring out the next great thing.

I like the idea that Apple is standing up for itself.  I don’t want Apple to turn into the next M$ but I don’t want them to roll over either.  Otherwise it stays as is - “Competitors are very good at Stealing the next great thing.”

xmattingly

I had to watch a couple of Nexus One videos to see what the difference is, and I have to tell you: Beyond some slight differences, that phone appears to be a straight up lift of technology that Apple brought to market (and patented the hell out of).

HTC needs to pay Apple royalties.

Bosco (Brad Hutchings)

@Jonesy. You should just want Apple to make great products that you like to use at a price you want to pay. When customers get into this “don’t want them to roll over”, all the trouble starts.

Apple screams about being stolen from, but it turns around and does the same. Nokia 3G patents, for example. John reposted an article he wrote about great power requiring great responsibility. Patents are the same way, and for a far more practical reason among big companies. They’re all infringers. They can’t avoid it. Even Apple. So in that case, you carry your patent portfolio and make sure everyone knows you’re carrying, but you do not whip it out to use against your competitors. Too much of everyone’s blood is left on the ground.

But if Apple wants to ignore the schoolyard rules, it will find itself pummeled from all sides. And it will be a useful exercise in reassuring all the big players that the schoolyard rules still exist.

rd

Mr. Bosco,

get you fact straight.  Apple is already paying
royalties for GSM, 3G, Wifi. 

Nokia is being accused of hiding patents from the standard
committee and going around other companies and shaking them for more money.

Let see the chip manufacturer that implements
the GSM standard has to pay for royalties.  In turn.
Apple has to pay royalties to Nokia.

Guess what Apple can play that game too.  All the OS
innovation in the 90s and 2000 is Apple’s doing.
They have patents that they can slap Google and Nokia
just watch and wait.

Bosco (Brad Hutchings)

@rd… Nokia sued Apple for infringing against 10 of it’s “essential” patents relating to GSM, UMTS, and WLAN standards. Apple shipped its iPhone 3G (which uses these patents) without agreeing to license terms with Nokia. Those facts are not in dispute. Apple’s defense is that Nokia wasn’t “reasonable and non-discriminatory”. Apple also had counter-claims against Nokia.

Now, go to your room and finish your Algebra homework.

geoduck

Justified or not, no one wins intra-fraternal wars.

bearcatrp

If the patents are approved and issued then pay the royaltied. No question about this. So if HTC DID use the patents that apple owns, shouldn’t be any question about paying for the technology. Same with apple and nokia. If its patent are theirs then apple should pay!

geoduck

Same with apple and nokia. If its patent are theirs then apple should pay!

Absolutely correct. However Apple has said they are willing to pay. What’s at dispute is whether Nokia has demanded much higher fees from Apple then other companies and further that Apple allow Nokia use some of Apple’s private IP in exchange for the right to use these patents that are part of the body of ‘standards’ that all companies in this business are required to use. That I don’t believe is allowed.

This is a case that is going to get very messy and the outcome could go either way. IMO neither Apple nor Nokia are completely innocent.

brett_x

Everyone loves drama, right? And there are very passionate people on both sides. This, to me, sounds more like an inflated hot issue used to drum up clicks in an otherwise slow news time (not necessarily from TMO). Maybe I’m just being cynical.

James

Though there are some circumstantial differences (the lack of a Microsoft deal, for example) all of this seems to me to be a recreation of the original debacle with the Mac OS and later OS X. Apple makes something, everyone else scrambles to replicate their innovation or success. This time they are in a position to protect themselves, and I believe they should.

I’m all for competition too, but it would be nice if innovation were the driving force behind it for once. I know some of the stuff coming in iPhone OS 4 will up the ante again, and I hope the industry response is more than starting their copiers and chest thumping about it.

I also thought that Mr. Matellaro’s earlier piece on abuse of power was spot on, but being pissed off that someone else beat you to the punch in the marketplace, as virtually all of these companies seem to be, is no justification for much of anything, particularly in courts of law. Still waiting for the superior smartphone that isn’t just an iPhone clone.

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