Surprising Winners of the Google-Apple War
Chris is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Tech titans Apple (NASDAQ: AAPL) and Google (NASDAQ: GOOG) have been locked in rivalry since Google entered the smartphone business. Steve Jobs, incensed by Google’s Android, even went so far as to declare ”I’m willing to go to thermonuclear war on this,” even though the two firms had a mutually beneficial history. Until recently Google’s map and YouTube services were vital pieces of Apple’s iOS but the latest update is set to boot both from prime spots in Apple’s ecosystem. With that change the door has opened for other companies to provide services in iOS, giving them a chance to be the big winners of the Apple-Google dispute.
Set to benefit the most are rival search engines Yandex (NASDAQ: YNDX) and Baidu (NASDAQ: BIDU), both of whom are fighting Google in their domestic markets. Yandex has been tapped by Apple to provide mapping data in Russia and its app will be promoted by Apple for those interested in even more detail. More importantly, it seems the Russian search giant is closing in on the real prize - becoming the default search engine for iOS in Russia. Such a deal would be major for both firms, helping Apple break from its Google ties and helping Yandex keep the search giant at bay.
Baidu has already gained ground in Apple’s ecosystem, as a search option both on Mac and on iOS. Rumors continue to circulate that Baidu is poised to take Google’s default search position in China, particularly since Apple already shares some of the search revenue. Given Apple’s increasing focus on China, becoming the default search engine could be a big boost for Baidu.
While Google is losing some ground due to Apple’s distancing, it is also poised to make some gains. It lost its pre-loaded slot for YouTube, but it has already responded with an all new app, one with the added benefit of mobile ads. As mobile continues to gain importance anything that helps the company monetize it is a win - Apple may have done Google a favor there.
For Apple’s part, the moves are smart ones particularly as it looks for ways to gain market share from Android. Pushing Google out of its operating system opens more room for differentiation, which was likely the motivating factor for its own mapping service. So far the mapping service is impressive, but still lacks the scale and depth of Google’s. Partnering with strong local firms like Yandex gives them the quality and data needed to compete. On the search front, both Yandex and Baidu command a majority of search traffic in their respective nations, making them obvious choices. One of Apple’s biggest selling points is “it just works” - providing the search solutions preferred locally strengthens that appeal.
It isn’t clear if there will be a winner between Apple and Google but one thing is - other companies (and the lawyers) will benefit. Yandex and Baidu seem to be in the best position to profit, providing vital services for Apple while protecting their domestic territory from Google.
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