According to author Walter Isaacson, Steve Jobs' biographer, the CEO planned to go 'thermal nuclear' - asserting "I will spend my last dying breath if I need to, and I will spend every penny of Apple's $40 billion in the bank, to right this wrong" - over Google (NASDAQ:GOOG) and its Android operating system. While the new CEO is much more cool having said he prefers litigation to battling, recent events may provide an answer to questions surrounding the matter.
Early in the week, in a move that sent both stocks soaring and crashing (Apple up 4.99 points, and Google down 3.4 points as of the time of writing), Apple (NASDAQ:AAPL) announced it would be booting Google's maps application from the iPhone's default mapping application and replacing it with it's own in-house solution. The shock was not so much that Apple would provide it's own solution, but that the application was in many ways very competitive, and in other ways, superior.
Apple unveiled its mapping application capable of vector-based images - which load faster, traffic-based analysis, and a secret 3d flyover that stunned analysts. The flyovers were completed by Apple commissioned aircraft that mapped entire major cities and their landscapes to show a three dimensional image of the city for their mobile devices. A new feature also included turn-by-turn navigation which, according to Business Insider, was held back by Google for competitive reasons; the feature did, however, make it onto Android handsets. The Apple based turn-by-turn navigation includes features that allow it to make recommendations in the middle of driving, based on traffic.
The surprises came when the company showed off how advanced this new program was and how it tied into its new mobile operating system - iOS 6. The features included updates to the Siri voice activated software and it's integration into Apple's map application. Using their voice, iPhone or iPad users can ask which way to find a location from their current GPS coordinates. Siri also prompts users to change directions if traffic becomes busy on the current route. Apple has already announced support from GM, Toyota, Honda, BMW, Audi, and Mercedes, for in car integration with the voice operated Siri. Additionally, the company will use the online service Yelp for business listings and reviews.
Alternatively, Google has also announced a set of features that include the 3d flyovers in a now obviously rushed attempt to combat Apple's new technology. Features included offline maps, 3d maps, and a backpack camera that maps streets from a backpack. This does, however, highlight that despite all the new features Apple's own map application does not have street view, a feature that Google has spent much time on, using cars to photograph every street. The company does, however, have turn by turn based navigation and has had it for some time. The company also has it's own business directories navigated by it's own search listings and the review site that it purchased recently - Zagat.
The bottom line is, should Google be worried about Apple? The answer almost certainly is YES and it's for a variety of reasons. While Google still manages to hit 900 thousand activations per day of it's operating system Android, the company has run into major issues with users updating to the latest operating system. With 74 percent of users still using Gingerbread, Ice Cream Sandwich has yet to take off among handset users. By contrast, 80 percent of Apple users are on the current operating system with built-in automatic updates.
The Android platform has also had trouble wooing developers to make high quality apps that people will buy. In contrast, developers earn 24 cents per dollar they earn on Apple devices.
The bottom line for Google is to earn more revenues from the online advertising business, and advance in the mobile arena. Estimates for global ad revenue remain steady with the S&P estimating revenues for online pay per click ads rising 3 percent in 2009, 15 percent in 2010, and 22 percent in 2011, with a projected 10 percent growth in 2012. By Apple sending it's advertising revenue potential from Google and giving it to competitor Yelp (NYSE:YELP), this has impacted a major feature of mobile advertising, and could alter expectations for Google's online expansion in the mobile arena.
In my opinion, while Google started with a 'do no evil' image, it is quickly deciding that it wants to compete against everyone and does not need friends.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.