Google and Samsung could lose their biggest client next month

Summary:Google could lose half (or more) of its ad revenue and Samsung could lose its biggest client if Apple decides to cut them out of its products at its Worldwide Developers Conference.

Google and Samsung could lose their biggest client next month - Jason O'Grady
Image: Jason D O'Grady/ZDNet

The war between Apple and rivals Google and Samsung could heat up next month as the Cupertino-based giant is rumored to announce some big changes at its its Worldwide Developers Conference (WWDC), including cutting off both Google and Samsung. 

Apple's WWDC kicks off on 10 June in San Francisco, California, and while the company never announces its plans in advance, there are rumblings that it could wield its almighty ban hammer against Google and Samsung. 

Samsung on the outs

In September, Apple cut the amount of chips that it ordered from Samsung for the iPhone 5. A report said that while Samsung is still an approved supplier, Apple instead picked Japan's Toshiba Corp, Elpida Memory and Korea's SK Hynix to supply DRAM and NAND chips for the iPhone 5. 

In August 2012, Apple won a landmark victory against Samsung after a US jury found that it had copied key features of the iPhone, and awarded Apple $1.05 billion in damages. More recently, it's been whispered that Apple is going to drop Samsung silicon  from the upcoming iPhone and iPad in favor of TSMC, a move that could have devastating repercussions for Samsung.

Google on the outs

Bloomberg reported in April that Apple's Eddy Cue met with Yahoo CEO Marissa Mayer to discuss "ways Yahoo can be more deeply integrated into the software that runs on the iPhone and iPad". The most obvious way to do this would be to replace Google with Yahoo as the default search provider on Mobile Safari in iOS 7. Apple could also replace Google with Yahoo in the desktop version of Safari in OS X 10.9, also rumored to be previewed to developers next month. Mayer was quoted in January as saying that she wants Yahoo to work with Facebook, Google, and Apple to widen the reach of the biggest US web portal.

Vendetta or good business?

There's clearly no love lost between Apple and Google. A case could be made that theft of Apple intellectual property occurred while Eric Schmidt was on the Apple Board (a charge Schmidt denies). Schmidt was on the Apple Board during the development of the iPhone, and Google's first Android phone appeared on the market suspiciously soon after its announcement. In July 2009, I called for Schmidt's dismissal, and he was gone from the Apple Board less than a month later. 

Then shortly before his death, Jobs gave this wonderful pearl to biographer Walter Isaacson:

… I will spend every penny of Apple's $40 billion in the bank to right this wrong. I'm going to destroy Android, because it's a stolen product. I'm willing to go thermonuclear war on this. 

Apple's been slowly moving away from Google over the past year, as evidenced by its removable of both Google Maps and YouTube from iOS.

Apple is their biggest client

Apple became Samsung's biggest client in February 2011 when the Wall Street Journal reported that it purchased $8 billion worth of LCD displays, NAND flash memory, and mobile chipsets from the Korean manufacturer. Samsung manufactures the "Apple" A5 and A6 chips used in all iPhones and iPads.

With iOS retaining over 65 percent of mobile marketshare, a switch away from Google as Apple's default search provider would definitely make a major dent in the company's advertising revenue. While iOS users could still browse to www.google.com (or use the Google Search app) for searching, most iPhone and iPad users use the search bar built into Mobile Safari. If Apple switches to Yahoo, the biggest winner would be Microsoft, because Bing powers Yahoo search (even though Yahoo wants out of the deal). 

Put yourself in Tim Cook's shoes. Would you dump Google and Samsung?

Topics: Apple, Android, Google, iPad, iPhone, Samsung

About

Jason D. O'Grady developed an affinity for Apple computers after using the original Lisa, and this affinity turned into a bona-fide obsession when he got the original 128 KB Macintosh in 1984. He started writing one of the first Web sites about Apple (O'Grady's PowerPage) in 1995 and is considered to be one of the fathers of blogging.... Full Bio

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