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Will Apple regret it if it ditches Google for Microsoft's Bing?

Minority Report: iPhone maker squares up to search giant in new round of battle
Written by Seb Janacek, Contributor

Minority Report: iPhone maker squares up to search giant in new round of battle

Rumours are abound that Apple will soon choose Microsoft's Bing for its iPhone search. Seb Janacek looks at what this means about the state of the relationship between Apple and Google - and whether they will live to regret the building animosity between them.

The fallout from the end of the Apple-Google affair has been swift, bitter and surprisingly vicious.

Once upon a time the two were close collaborators and shared board members. Now they're squaring up as two of the bitterest enemies in technology - rivals in browsers, operating systems, smartphones and most recently web advertising.

The relationship between the two companies is unrecognisable from just 12 months ago.

According to a recent report from BusinessWeek, the rivalry is such that Apple is prepared to ditch Google and switch to Microsoft's Bing as the default search engine on the iPhone, the iPod touch and presumably any other touchscreen devices it may or may not be on the verge of announcing today.

Such a deal is likely to outrage the traditional Apple fan base. Just listen to the crowd reaction when Steve Jobs announced Apple would partner with Microsoft in 1997.

However, the traditional Mac fan base is being steadily diminished by the increasing hordes of iPhone users who, quite frankly, couldn't give a stuff about traditional rivalries.

Seriously though - Bing as the default search engine on the iPhone? Truly a case of the lion and the lamb lying down together.

So what are Apple's options for search? I've outlined four...

  1. Stick with Google
    The popular choice for most consumers as Google is a well-loved brand and synonymous with search. Bing is clearly less so. However, sticking with Google would let Apple's newest and chief competitor take advantage of its platform in the very market it plans to compete in.
  2. Switch to Microsoft's Bing
    Despite an age-old tradition of enmity between Apple and Microsoft, there is also a rich history of collaboration. From the software Bill Gates developed for early Apple computers, through to Office on the Mac and iTunes for Windows, all have been fundamental in helping Apple shift a fair number of units and helping Microsoft sell its software.
  3. Use some other competing, viable search engine.
    OK, scratch that one. Too unlikely.
  4. Develop its own search engine.
    It's a possibility. Citing sources close to Apple, BusinessWeek claims the company is looking into creating its own search technology, suggesting "if Apple does do a search deal with Microsoft, it's about buying itself time".

Just a day prior to the launch of Google's Nexus One phone, Apple announced...

...the acquisition of mobile ad firm Quattro Wireless for a reported $275m. Search goes hand-in-hand with mobile ad revenues and, as the BusinessWeek article put it, "Apple isn't going to outsource the future" and rely on the technology of a company which has failed to topple Google.

Launching a search product to compete with Google and Microsoft is a huge challenge. Google dominates web search both in brand and market share. Its name is used as a generic verb for web searches. Despite the fact Apple has plenty of cash in the bank for R&D, simply throwing a lot of money at developing a Google search killer doesn't work - just ask Microsoft and Yahoo!

There are huge challenges ahead for Google, too. According to mobile advertising company AdMob the majority of mobile advertising is viewed on Apple's iPhone and iPod touch. Although Google's Nexus One 'superphone' has garnered much attention, some early reviews suggest the user experience isn't up to Apple's standards.

In addition, the search giant will have to work hard on its marketing to sell the Android experience to the general public. The iPhone has succeeded in selling its brand to the market. According to Apple's most recent quarterly results, iPhone quarterly sales have doubled year on year. Android is currently a geek brand with a lot of ground to cover if it wants to catch up with the iPhone.

A short-term deal with Microsoft seems an attractive option for Apple. Microsoft's urgent need to gain some traction in the mobile advertising market - remember, it was prepared to pay an ungodly sum for Yahoo! - means Apple is in a strong negotiating position to cut a deal on sharing ad revenues.

The mobile ad market is a huge prize, worth billions each year. Conquering it would take the perfect blend of software and hardware.

Still, I am left wondering: how did it come to this? Twelve months ago it seemed Apple and Google complemented each other so well. Their relationship may have made regulators jittery but the fruits of their partnership kept investors and customers very happy.

Now they square off into direct competition and prepare to do battle in strange new markets with unfamiliar new weaponry.

Meanwhile, the presence of Microsoft, a huge rival for both companies, provides an uncertain variable. A moment may come that sees both Apple and Google regret they didn't continue to work together - but it's far too late for that now.

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