Apple and Google’s content cold war heats up

September 28, 2012 8:49 am

The Apple maps fiasco brings to mind that old joke about what a European version of Hell would be like: a place where the chefs are all English, the lovers are Swiss and the Italians are left to make sure things run on time.
But, like it or not, this is where the new mobile technology world could be headed. In the smartphone version of hell, the browsers and apps stores are modelled on a BlackBerry, the social networks are run by News Corp and the hardware looks like the first Amazon Kindle. Apple’s new iPhone maps, which have a habit of mis-locating key buildings and public sites, are an honourable addition to this roster – though they will surely get better fast.
With the shift to mobile there are valid reasons for tech companies to stray from their usual turf. Smartphone users want the core functions of their devices to be integrated and easy to use. Keeping these in-house makes it possible for a company like Apple to keep control of the overall experience of its products. It’s a similar approach to that of carmakers: the seats, headlights and brakes are not optional extras, but built-in features.
Yet commercial ambition and competitive jealousies are also at work. Ending the distribution of Google Maps and YouTube as preloaded apps on the iPhone is a way for Apple to take a bite out of a rival’s business. Keeping access to a user’s personal data is even more important: digital maps, for instance, are a place where users reveal their location and intent as they search for local services.
In the world of smartphones and tablets, it has been clear for some time that the focus of competition has been shifting towards content and services.
Courts may be left to decide whether Samsung copied the rounded corners on its tablet illegally from Apple but, for most consumers, the argument is moot: there is less and less to choose between the hardware packages.
There are a number of consequences that flow from this.
One is that the tight ecosystems coalescing around smartphones and tablets raise the stakes for the many companies that are not allied to a Google or an Apple. Anyone providing a key mobile service – such as maps, local information, music, pictures – is potentially in the line of fire.
Yelp, which fought with Google over the use of its local reviews, has now been sucked into the Apple camp, with its reviews integrated into the latest version of the iOS mobile operating system.
Pandora, a US cloud music service, risks being left out in the cold as the big mobile device makers develop their own.
A second consequence is that content is likely to become the next important battleground. Having been forced to stop scraping local recommendations from Yelp, Google has gone on to buy restaurant recommendation service Zagat and, last month, travel guide company Frommer’s.
These content plays are starting to get a lot more serious. Microsoft this month announced the opening of a video studio in Los Angeles with ambitions to rival the city’s leading TV production houses. The resulting shows will not just find their way to a TV set via the Xbox games console – Windows phones, the forthcoming Surface tablet and future Microsoft gadgets will provide an audience far bigger than those available on most cable or satellite systems.
Whether or not to get sucked into the content scramble is now one of the biggest questions facing Apple. It has already dabbled with live concerts on iTunes and it has the cash to make a serious acquisition of content to set its devices apart. Such a move, however, would show that it no longer has confidence in the strategy that has long set it apart: a single-minded focus on hardware innovation.
A third question surrounds the future of app stores as a conduit for innovation in tech. To use the car analogy again, they risk becoming like AM radios: a source of distraction but not a mechanism for changing the core functions of the vehicle.
One test will come when Google tries to reclaim lost ground on the iPhone by putting a maps app in the Apple store.
Under its rules for developers, Apple reserves the right to exclude anything from its App Store that duplicates key features of its devices. Apple customers might object, but antitrust authorities would be unlikely to intercede.
Apple and Google may reach an uneasy compromise and avoid a showdown this time around. But their rival ecosystems – like those run by Amazon and Microsoft – are hardening. If more users end up taking a wrong turn because they relied on a smartphone map, mark it down as one of the costs of progress.

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