In the 1990s, Microsoft Internet Explorer battled Netscape Navigator in the great Web browser wars. In the 2000s, Google and Yahoo locked horns over Internet search — and we know how that turned out. Today, the latest high-stakes tech conflict is between Apple’s iPhone and Google’s Android mobile operating system for supremacy in the smart phone market.
Each of these clashes defined an era of Internet history. Apple vs. Android is no different. Everyone agrees that the struggle for Internet advantage is shifting to the mobile realm, and iPhone and Android have surged to the front of the pack with diametrically opposed business models. Neither of these players will be vanquished anytime soon — these battles take years to play out — but the company that gains the upper-hand will be best-positioned to take advantage of the massive structural shift from desktop PCs to smart phones and tablets.
Apple and Google realize how huge the stakes are in this fight. Apple’s late CEO Steve Jobs revolutionized the mobile phone market with the iPhone, and he was furious when Google launched Android, because he was convinced it ripped off features from the iPhone. Google, meanwhile, has poured millions of dollars into developing Android, and billions more bolstering its intellectual property position by buying Motorola Mobility for $12.5 billion.
This “smartphone showdown” is important because Apple and Google are advancing radically different business models to the fight. This is bigger than just a commercial clash between two tech titans. It’s a war between two fundamentally different visions for the future of computing, described in simplistic terms as “closed” vs. “open.” Apple’s model is end-to-end control over the iPhone process, from hardware to software to the mobile applications that it must approve for sale in the App Store. Google’s model has been to distribute the Android system for free to the developer community at large, and let a thousand flowers bloom.
Each company has been successful with its respective strategy: Apple makes $1 billion per month on iPhone sales, and the device is considered the gold standard for smart phone design. Android, meanwhile, generates vastly less revenue per unit sold, but has racked up massive market-share gains, growing to lead the global mobile OS space in just 5 years.
This battle may have “wonderful” consequences for consumers, but it hasn’t exactly been pleasant for the combatants. In addition to cutthroat competition in the marketplace, Apple has been slugging it out in courtrooms around the world over intellectual property with Google’s hardware partners. Apple’s global patent offensive against Samsung, HTC, and other Google partners (including the search giant’s newly acquired Motorola Mobility division) is really a proxy fight against Android. In August, South Korea-based Samsung was hit with a $1.05 billion verdict after a federal jury concluded that it had infringed Apple’s iPhone patents.
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