A rumor started to circulate early yesterday that Apple and Microsoft are engaged in discussions over the displacement of Google search on the iPhone. According to BusinessWeek (source), Apple is considering using Bing as the search engine on the iPhone. The reasons that the authors gave for this move included:
- This was a financially motivated decision. Microsoft was offering Apple a bigger revenue slice of the advertising pie for incorporate Bing than Google.
- This was an effort to thwart Google’s recent jump into mobile. It seemed that Google was moving in on Apple’s territory with their introduction of the Nexus One device.
While some may buy into this rumor, there’s very little reason to believe it. Here’s why:
Apple is in the business of designing beautiful devices with exceptional user-experience for the consumer market. Google has dominant position in the web search market. Google reached this point by creating a simple, user-friendly search engine so having Google Search on the iPhone makes for a perfect match. While Google may not want to share more of their search revenue, they’ve bowed to the pressure of News Corp owner Rupert Murdoch when he proclaimed in November 2009 that Google was stealing his paid content (source) and that he would switch to Bing if he had no other option.
Regarding the competitive threat, there are two reasons that Apple may not be worried. First, John Paczkowski of AllThingsDigital wrote about a rumor that Microsoft is planning to release a Zune Phone in the next couple of months (source). In case you’re wondering, this rumor originally surfaced back in late 2008 (source) but this is the FIRST time that there’s thought that the phone will be pink. Currently, there’s no proof that Microsoft or any other phone/mobile OS marker is going to magically recapture Apple’s market share with their mobile offering. This rings true considering that Nexus One sales estimates reached a paltry 20,000 in the first week of offering according to mobile analytics service Flurry (source). If the Zune rumor is taken as fact, then Microsoft is a rival to Apple as much as is Google so there’s no real rush/need to switch.
In my opinion, it feels more like Apple is playing a good game of chicken with Google and Microsoft is just caught in between.