Apple and Google: Too Close for Comfort?

It’s a given that competitive landscapes change over time, especially as cutting-edge technologies, such as the iPhone, reshape consumer behavior and create strong link between formerly unrelated markets. There’s no better example of this than the complex, often strained relationship that now exists between Apple and Google.

The two beacons of innovation used to operate in separate silos; Google would duke it out with brands like Yahoo or AOL for dominance in the search market, while Apple fought with HP or Microsoft to carve out a niche in the hardware/software industry. Since the introduction of the iPhone, however, the two brands are now operating in (more or less) the same spheres, competing directly against each other, while simultaneously sharing ideas (at least for now).

Let me explain.

Apple worked with Google executives to interweave several Google-related apps into the iPhone platform – such as Gmail or Google maps – to fulfill consumers’ demands for reliable e-mail access and location-based information on the go.  The sharing of ideas and technology was beneficial to both parties; Google could expand its reach into the mobile consumer market, while Apple could provide its customers with the practical search capabilities they needed.

All was going pretty well between the two companies for about a year or so, until Google wanted a larger piece of the mobile user pie. In September 2008, Google pushed the limits of its seemingly symbiotic relationship with Apple by introducing the G1 phone with Google’s new Android operating system. The G1 not only pitted Google directly against Apple, its mobile partnership with TMobile didn’t make friends at AT&T either.

To add insult to injury, Google’s new smartphone looked a lot like the iPhone and many (including NYT tech blogger David Pogue) felt it was clearly intended to be an iPhone knockoff – complete with the online downloadable app and music stores. Try as they might, Google’s phone and app store just couldn’t hold a candle to Apple’s sleek designs, which might explain why Apple chose to retain some close ties with Google execs – including Google Chairman Eric Schmidt who had a long-time seat on Apple’s board – even after the launch of the G1.

As Darcy Travlos (Forbes) points out in her latest article, “The Real Issue Between Apple and Google,” however, Eric Schmidt recently stepped down from the board of Apple, suggesting to the investor community that the two corporations are indeed converging and the relationship may hit the skids again.

As the two companies’ interests intersect, Apple and Google will undoubtedly find themselves in quarters that might be too close for comfort and we as consumers are waiting to see just how far either side will go to maintain a competitive advantage.

What do you think? 

Contributed by: Gretchen Doores; follow her @canadiangal84