Apple's move to systematically drop Google from its iOS could pay off in the future as the company gains mobile market share with the help of various partners, according to Piper Jaffray analyst Gene Munster.
In a research note, Munster reckoned that Google will struggle trying to create a unique mobile experience with Android. Apple will focus on "the next phase of mobile OS innovation, integrated services" and poach market share. The news comes a day after news that Apple will omit Google's YouTube from iOS 6.
Bottom line: Munster is betting that Apple can cut out Google, add its own technology and selectively partner to bolster iOS with the help of Twitter, Facebook and other third parties. Munster said:
Google is trying to create a unique mobile experience by further integrating its own variety of services into Android. While currently the battle has no clear leader, we believe that the next phase of mobile OS innovation, integrated services, will begin to favor Apple as the front runner. At this point we believe Apple's strategy of integrating best of breed 3rd party partners gives them the upper hand as it forces Google to venture outside its core competency of search. We believe Apple's advantage (partner approach) in this next phase of mobile will help iPhone's global smart phone share to increase from 20% in CY12 to 32% in CY15, while Android share will drop from 58% in CY12 to 53% in CY15.
The upshot is that Munster thinks the mobile platform wars are entering a new phase---the third inning. The first inning revolved around OS features and the second was all about third party apps. Google has closed the Apple gap on both counts. Now integrated services are the battlefield.
Munster said that Apple is taking a partner approach. That argument holds---unless you count Google as a partner. But Apple has worked with Facebook, Twitter, Yelp and others to integrate them into iOS. Google relies on its own brands---Google+, Gmail, Zagat---to make Android unique.
As for the fourth inning, Apple and Google will duke it out on commerce and local deals. Munster argues that Apple will integrate Groupon, LivingSocial and others. Google will bet on Google Offers.