There is buzz sweeping over China right now that Apple Inc. (NASDAQ:AAPL) will soon offer Baidu in their iOS operating system as the default search engine. This move will no doubt hurt Google’s numbers who recently revealed that two-thirds of its mobile search comes from Apple iOS devices.
This move is all part of Apple’s plan to further get on China’s good side and to put a dent in Google’s armor. Apple is desperately trying to open new revenue and growth sources and China is the largest growth opportunity right now for Apple. In addition to giving Google a loss on search traffic, there is speculation that there will be a new mapping solution by Apple that will replace Google Maps.
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Right now, Baidu dominates the Chinese search market with 80% market share. That is only going to help Apple’s popularity because they will be partnered up with the most popular search option in China. Recently, China passed the United States in Android and iPhone activations which means that China has the largest smartphone market in the world, a largely untapped area for Apple.
If Apple can continue to get good press in China and develop more partnerships with other dominating Chinese companies, it may spell huge profits for the company as well as many years of growth.
Since taking the CEO position, Tim Cook has made China his mission as CEO. China, he believes, is the “key” to the future of Apple. You can not have a successful company like Apple without some Chinese exposure helping you. If Apple can fully integrate into China, the recent milestones of $600 a share, etc will be nothing. China would arguably increase profits massively while increasing margins as well.
Google on the other hand is witnessing a bit of a slowdown. This year has not been a good year for Google so far who has lost 7% of its market share to Baidu and it stands to lose once Apple integrates with Baidu on its iOS system. Google has been in some issues lately which is unfortunate but I have no doubt that they will be able to find ways around Apple and its love affair with China and Baidu. As of right now the Chinese are not too fond of Google so it could be awhile before the company is able t make any noticeable difference in the vital country.