Google's Schmidt: Apple Should Have Kept Our Maps

September 25, 2012 1:47 pm

TOKYO—Google Inc.’s popular mapping application likely won’t migrate to Apple Inc.’s iPhone 5 anytime soon, the Internet search giant’s executive chairman Eric Schmidt said Tuesday.

Amid the controversy surrounding Apple dumping Google Maps in favor of its own map system, WSJ’s Ian Sherr spells out Apple’s efforts to match the detail of Google Maps and how iPhone users can still utilize Google Maps on their smartphone. Photo: Apple.

But Mr. Schmidt, in Tokyo for the Japan launch of his company’s Nexus 7 tablet computer, declined to rule out a future possible deal and said his company remains in regular contact with Apple on a range of issues. Google supplied Google Maps for the iPhone until the version that hit stores at the end of last week, racking up sales of five million in its first three days.
As some Apple fans continue to bemoan the mapping switcharound, the clamor highlights the increasingly complex relationship between players in the hottest segment of the electronics industry. As increasing numbers of software makers move to sell their own hardware, companies that were once simply commercial partners are increasingly becoming competitors.
Speaking to a group of reporters after the Nexus 7 presentation, Mr. Schmidt said Apple would first need to approve Google Maps for use in its updated iPhone operating system.
“We’ve not done anything yet,” Mr. Schmidt said. “We’ve been in touch with them for a long time [about Google Maps], and we talk to them every day,” he said. Mr. Schmidt declined to explain the nature of talks between Apple and Google, describing Apple as a “huge Internet search partner.”
“In my opinion it would have been better to retain our maps,” he said. “It’s their decision, I’ll let them describe it.”
The comments come as Google seeks to drive home its campaign to become a significant player in the consumer-electronics business, particularly in the fast-growing tablet market. Research firm IHS iSuppli has forecast world-wide tablet sales for 2012 will surge 85% to 126.6 million units from 68.4 million units in 2011. Apple’s iPad holding a dominant market share of about 60%.
The launch of the seven-inch Nexus 7 in the home market of Sony Corp., Panasonic Corp. and Sharp Corp. also provides a reminder of the kind of competition that has left Japan’s electronics makers struggling to cope.
The Nexus 7—well received by reviewers on its U.S. launch earlier this year—will retail in Japan for ¥19,800 (approximately $250), about half the price here of both Apple’s latest iPad and Sony’s latest Xperia tablet, which uses Google’s Android operating system.
The device may also help Google penetrate the Japanese market more deeply. Unlike many countries, the Google search engine isn’t dominant here, with Yahoo Japan Corp. the leading brand name—even though its search engine is powered by Google technology.
Still, Mr. Schmidt, who led Google from 2001 to 2011 before co-founder Larry Pagetook over as CEO, said Google still doesn’t see itself as a hardware company. “We’re not in the hardware business as a big deal,” he said. “It’s a very tough business with very low margins.”
Asked whether the low cost of the Nexus 7 tablet—at $199 in the U.S.—means the device costs more to produce than its sale price, Mr. Schmidt said, “No, I don’t think that’s the case.” However, he acknowledged that the key to the device’s profitability lies in its ability to attract advertisers to Google’s services.
The executive chairman also said that Google has yet to experience a negative reaction to the development of its own tablets from other makers of hardware that are dependent on Google’s Android system but now find themselves competing directly with a commercial partner.
“It’s important to talk to partners, we’ve approached them in advance to let them know what we’re trying to do,” Mr. Schmidt said. “We tell them well ahead of time.”
Mr. Schmidt and Google’s Asia-Pacific President Daniel Alegre cited the company’s YouTube online video service as continuing to be a major factor in boosting content that pulls in viewers and advertisers.
Mr. Schmidt used the growing interest in Korean popular music, and in particular the viral hit “Gangnam Style” by pop performer Psy—now boasting over 270 million views on YouTube—as an example of how smaller businesses can build on the Android platform and use it to export their products. “It’s a strategy for any good content provider, but the content does have to be good,” said Mr. Schmidt.
YouTube’s popularity and ease of use has also brought occasional problems, however. In the latest case a trailer for the controversial anti-Muslim film “Innocence of Muslims,” sparked international protests and attacks on some U.S. diplomatic posts, which led to the death of U.S. ambassador to Libya Christopher Stevens and three other American diplomats.
“It was uploaded [to YouTube] a while ago and meets all the Google criteria for being there,” Mr. Schmidt said. “It will stay up…We gave the U.S. Government the same answer.” However, he said, “In some countries it’s illegal, so it’s not up there, and in others we’ve blocked it on a case-by-case basis.”
“Obviously we deplore the violence,” he said. “In my view, most of the rioters did not actually see the video, but some TV stations with a point of view used the video to get viewers excited.”
Meanwhile Mr. Schmidt said that CEO Mr. Page, who fell ill in summer with an unspecified ailment that affected his voice, is back at work and carrying out his duties.
“Larry is fine, I talk to him every day, and I emphasize the word ‘talk,'” Mr. Schmidt said. “I don’t know whether he’ll be on next month’s earnings call, but he’s running staff meetings, everything’s fine.”

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