Apple ramps up smartphone services in ‘silent war’ against Google

Apple is taking steps to separate its mobile operating system from features offered by Google’s parent company Alphabet, making advances in maps, search and advertising that have set the tech giants on a collision course.

The two Silicon Valley giants have been rivals in the smartphone market since Google bought and popularized the Android operating system in the 2000s.

Apple co-founder Steve Jobs called Android “a stolen product” that mimicked Apple’s iOS mobile software, then declared “thermonuclear war” on Google and ousted the search firm’s then-CEO Eric Schmidt from Apple’s board in 2009.

While the rivalry has been quieter since, two former Apple engineers said the iPhone maker has had a “war” against Google ever since.

One of those people said Apple is still engaged in a “silent war” against its arch-rival. It does so by developing features that could allow the iPhone maker to further differentiate its products from services offered by Google. Apple did not respond to requests for comment.

The first front of this battle is mapping, which started in 2012 when Apple released Maps, displacing its Google rival as a pre-downloaded app.

Apple CEO Tim Cook had to apologize for software errors in previous versions of Maps © Cesare Abbate/EPA-EFE

The move was supposed to be a shining moment for Apple’s software prowess, but the launch was so buggy — some bridges, for example, appeared to be deformed and sank into the oceans — that CEO Tim Cook said he was “extremely sorry for the frustration , this has caused. our customers”.

However, Apple’s maps have improved significantly in the past decade. Earlier this month, it announced Business Connect, a feature that lets businesses claim their digital location so they can interact with users, display images and offer promotions.

This is a direct challenge to Google Maps, which partners with recommendation platform Yelp to offer similar information and monetize advertising and referral fees.

Business Connect goes further by leveraging Apple’s operating system to provide iOS users with unique features, such as seamless integration with Apple Pay or Business Chat, a text-based conversational tool for commerce.

“Apple is very well positioned to decouple from Google more and more, largely under the guise of consumer privacy,” said Cory Munchbach, CEO of BlueConic, a customer data platform.

The other front in the battle is search. While Apple rarely discusses products while they’re in development, the company has long worked on a feature known internally as “Apple Search,” a tool that facilitates “billions of searches” a day, according to employees on the project.

Apple’s search team dates back to at least 2013, when it bought Topsy Labs, a start-up that had indexed Twitter to enable searches and analytics. The technology is used every time an iPhone user asks Apple’s voice assistant Siri for information, types queries from the Home screen or uses the Mac’s “Spotlight” search feature.

Apple’s search offering was expanded with the 2019 acquisition of Laserlike, an artificial intelligence start-up founded by former Google engineers that had described its mission as providing “high-quality information and diverse perspectives on any topic from around the web”.

Josh Koenig, chief strategy officer at Pantheon, a website-operations platform, said Apple could quickly take a bite out of Google’s 92 percent share of the search market by not making Google the default for the $1.2 billion. iPhone users.

“If Apple could build something that was essentially as good as ‘Google classic’ — Google circa 2010, when it was a simple search engine that was less optimized for ad revenue — people might just prefer it,” Koenig said.

However, it would be expensive. Alphabet pays Apple between $8 billion and $12 billion a year for Google to be the default search engine on iOS, according to the US Department of Justice.

Displacing Google on the iPhone and assuring users that their web queries won’t leak to third-party data brokers would fit well with Apple’s privacy-focused software changes and marketing campaign — while potentially delivering a huge hit to Google’s business.

Man looking at Google Maps on a smartphone
Apple hopes to compete with Google Maps, which makes money from advertising and referral fees © Justine Bonnery/Hans Lucas via Reuters

Since it launched a new privacy policy in April 2021 that stripped companies like Facebook and Snap of easily building user profiles and tracking their actions from app to app, shares of those companies have collapsed by 58 percent and 84 percent, respectively.

“Google could still be a better search engine, but if I want to search for me potentially getting cancer, who would you rather have that information?” said Anshu Sharma, CEO of data protection platform Skyflow.

The third front in Apple’s battle could prove the most devastating: its ambitions in online advertising, where Alphabet earns more than 80 percent of its revenue.

Last summer, Apple posted a position on its jobs pages saying it was looking for someone to “drive the design of the most privacy-promoting, sophisticated demand-side platform possible.” A DSP is a digital media buying tool that lets advertisers buy ad inventory on multiple exchanges.

The job ad was an indication that Apple wants to build a new ad network, one that would reshape how ads are delivered to iPhone users and keep third-party data brokers out of the loop.

The role was filled in September by Keith Weisburg as group product manager for Ad Platforms. Weisburg, who also spent a decade at Google and YouTube, had been a senior product manager for Amazon’s DSP.

Apple’s move on three fronts has made Alphabet’s position in iOS look “more vulnerable than it has ever been before,” said Andrew Lipsman, an analyst at Insider Intelligence.

“Apple is increasingly motivated to enter the search business as it builds out its advertising arm,” he said. “Search is the key to massive amounts of first-party data, and it’s the new battleground for the future of digital advertising.”

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