Apple, Google Smartphone Market Battle Heating Up

Apple and Google are competing head-on for smartphone marketshare, and that battle could lead to some big changes for iPhone users -- including dropping Google as the handheld's default search engine for an in-house solution, or even a deal with Microsoft to make Bing the iPhone's default search engine, according to Businessweek.

Google's launch of the Android-based Nexus One smartphone put the company in head-on competition with Apple and the iPhone for smartphone marketshare. Previously, the Internet search company and Apple were competing for smartphone marketshare a little less directly because Google's Android platform was being used only by other cell phone makers.

Dropping Google in favor of Microsoft's Bing may not seem like the most likely option, it's still a possibility, according to Ovum analyst Jonathan Yarmis. Another possibility is that Apple is working on building its own online search engine at the data facility it is building North Carolina.

"I fully expect [Apple] to do something in search," Mr. Yarmis said. "If there's all these advertising dollars to be won, why would it want Google on its iPhones?"

Apple also recently purchased Quattro Wireless, a company that serves up targeted ads to mobile devices including the iPhone and other smartphones. The deal moves Apple squarely into Google's ad serving territory, and follows the Internet search giant's purchase of AdMOb -- a similar company that serves up mobile ads, too.

In July 2009, Apple bought PlaceBase, a company that specializes in online maps. PlaceBase CEO Jaron Waldman became part of Apple's new Geo Team, although Apple hasn't said exactly what its Geo Team does.

If Apple is planning on cutting Google out of the iPhone, its current acquisitions lineup is a good start. Apple has its own mobile ad serving company, and an online map company that could potentially serve as an alternative to Google Maps. It also has its own giant data center in the works that could potentially handle online search services as well as Web-based apps and data storage -- areas where Google already has a presence.

Just exactly what Apple plans to do to stay ahead of Google in the smartphone market is a well-guarded secret, enough of the pieces have fallen into place to let consumers know the competition is heating up, and in the end competition is always a good thing for consumers.