Google Inc (NASDAQ:GOOG)’s executive chairman, Eric Schmidt, declared that the Apple vs. Google battle, is the ‘defining fight’ in the technology industry. The search engine giant’s executive, who is also the former CEO believes that, eCommerce giant Amazon.com Inc. (NASDAQ:AMZN), and the market leader in social networking, Facebook Inc. (NASDAQ:FB), fill up the remaining two slots, in what he refers to as, “The Gang of Four”.
Notwithstanding, Eric Schmidt believes that the Apple vs. Google rivalry could lead to two extremes, first; consumers could benefit on price wars, and second, this could eliminate innovation in the industry as the small, innovative players become victims of patent wars. While some of you might be wondering how on earth this qualifies to be a clash of the titans, especially given the fact that Google does not make smartphones; the whole idea is in what runs the smart phones and similar devices.
Google Inc (NASDAQ:GOOG) is the owner of the Android Operating software for smart devices, including, a cross-section of smartphones and tablets, while Apple Inc. (NASDAQ:AAPL) is the sole producer of the iOS, the operating system you would find in all iPhones and iPads.
This battle of software is what makes Apple vs. Google, a defining fight in the industry today, and Schmidt believes that Google holds the upper hand, predicting that, in the next one year, there will be more than one billion devices running on its Android O.S. “The growth rate of mobile adoption exceeds everyone’s expectations every quarter,” Schmidt said.
Speaking to All Things D, Eric Schmidt said, “the Android-Apple platform fight is the defining fight in the industry today,” adding, “we have not seen platform fights at this scale,” he said. “The beneficiary is you guys [consumers]. Prices are dropping rapidly. That’s a wonderful value proposition”.
Nonetheless, Schmidt highlighted the patent wars in the industry as a dark side, which he refused to elaborate in details, as the topic makes him too upset. “These patent wars are death,” Schmidt said, highlighting the 200,000 plus patents, in the software markets as a deterrent factor to innovation.
Schmidt says that the software market is always overlapping, and added that the small players cannot protect their technology, as compared to industry giant like Samsung, Apple Inc. (NASDAQ:AAPL) and Google Inc (NASDAQ:GOOG), and this puts a barrier to innovation.
The Google executive believes that even Microsoft stands no chance versus Apple, as opposed to Apple vs. Google, platform rivalry, where both sides make products which consumers want. When asked why he omitted Microsoft Corporation (NASDAQ:MSFT) from his “Gang of Four”, Schmidt said, “it’s a well-run company…but the don’t make state-of-the-art products”.
To justify Facebook Inc (NASDAQ:FB)’s inclusion, Eric Schmidt said that Facebook Inc (NASDAQ:FB) is attempting to become the world’s communications hub,” while, with regard to, Amazon.com, Inc. (NASDAQ:AMZN), he believes that the eCommerce giant holds the potential to become the world’s largest online store.
Schmidt who used to sit on Apple Inc. (NASDAQ:AAPL)’s board believes that the Apple vs. Google rivalry began the moment Android became a market leader in smart device platforms. He also said that Google knew long ago that Apple Inc. (NASDAQ:AAPL) was going to come up with its own maps, but he believes that the iPhone maker has finally realized that the maps business is hard to run and requires a lot of capital.
“What Apple has learned is that maps are really hard,” Schmidt said. “We invested hundreds of millions of dollars in satellite work, airplane work, drive by work, to get the maps accurate”. He later added that Google Inc (NASDAQ:GOOG) can only make a new map app for Apple subject to Approval by the iPhone maker.
In regards to Google’s search engine business in China, Eric Schmidt said that the local-based Baidu.com, Inc. (NASDAQ:BIDU) will continue to dominate the Chinese mainland market, as the Government of the world’s most populated nation holds the cards as to what market Google can access within its boundaries. He later added that there are no near term plans of venturing into China, and Google will continue running its business from Hong Kong.
Yesterday Google Inc (NASDAQ:GOOG) stock closed at $744.56 per share, up $0.43, or 0.05% rise, from the previous close; while Apple Inc. (NASDAQ:AAPL) stock closed at $640.91 per share, up $5.06, or nearly 0.8%, from the previous close.
