Apple's slow attack on Google

When Google entered the Mobile phone space and blatantly copied Apple, the relationship between the two companies soured. From being partners and friends, they soon became sworn enemies.

For a long time, Google was the one taking all the pot shots at Apple. Then last year, Apple announced iAd. This was the first direct response from Apple, targetting Google's biggest revenue streams. However, iAd focussed only on the top end of the advertising market - with a minimum ad budget of $1 million - so it never really took off in a large way.

At the same time, Apple also introduced a feature in the Safari browser - called the Reader. Reader strips out ads, unneccessary pictures, and formats the text content into an easy to read "black-text on white" format. Considering Google makes most of its money from ads, this attempt to sidetrack the ads was another attack on Google. However, Safari has a very small share on the desktop, so it did not really hurt Google much.

Last week however, Apple announced some things that would directly hurt Google and hurt Google bad. Firstly, they announced that the Reader feature would be available on Safari on iOS 5. While Safari has a small marketshare on the desktop, in the smartphone segment, Safari has a massive market share. Apple has 18% of the global smartphone market, but this 18% has a disproportionately high share of mobile browsing market. Considering that most of the installed Blackberry and Symbian phones have pathetic browsers that aren't really used much, and considering that a lot of the cheap Android phones don't even sell with data plans (when you buy an Android phone, you get another one free - and most of these free phones end up being used like iPod touches at home), Apple's share of mobile browser works out over 50%.

The Reader functionality on iOS 5, is going to hurt Google massively. And I would not be surprised if future versions of iOS5 offered the Reader functionality as the default behavior in Safari - or maybe add an option to "Open in Reader" - in the same list that offers "Open in New Tab", "Add to Reading List", etc. If this is done, the user would never ever see the ads - meaning, the value of ads would drop significantly.

The second major initiative is the iCloud announcement. Google is the king of the cloud space, offering a lot of free services. However, everyone and their dog knows that Google uses these Cloud services to learn more about you, and target ads more effectively. The privacy implications of this are enormous. With Apple, the privacy fears are a lot less - because ads are not that important to Apple. Apple makes enough money on its devices, and can afford to offer iCloud as a way to make their devices more attractive. Even if Apple offers Ads, their track record on privacy is much better than Google's, and customers are likely to trust Apple more than Google.

I wonder when Apple is going to take on Google directly - and get into Search. That will be the mother of all battles!