MAY 29, 2015
Google announced a bunch of new products yesterday at "Google I/O," and tech blogger Ben Thompson has written a long and interesting story about how Google and Apple are fundamentally different from each other.
I would add that that makes Google a much more interesting and - in the very long run - more important company than Apple.
Apple sells expensive products that make a great experience. But Google is pulling billions of people online and giving the broad swathe of humanity its first access to the internet and smart connected devices. In other words, Apple may merely be the Ferrari to Google's Ford. Sure, Ferraris are nicer than Fords. But Ford was the company that made the car something almost everyone could afford. Historically, Ford changed history. Ferrari is merely an interesting brand in that history.
Google's mission - to bring connected computing to everyone - by implication is as important to Earth economically as the Industrial Revolution was. That's why Google has its "Loon" project to bring the internet to everyone, and why it has launched a $100 Android One smartphone for developing countries.
But that isn't Apple's mission. Apple has no project in which it offers equipment free or cheap to the "next billion" who cannot yet afford iPhone 6.
Apple CEO Tim Cook: He has a nice phone but he is not Henry Ford.
Thompson begins by pointing out that back in 2013, the rumour was Apple would launch a discount version of the iPhone, the iPhone 5C, for hundreds of dollars cheaper than the topline new iPhone 5S. But Apple did the opposite. The 5C was only slightly cheaper than the 5S, sending a clear message about how Apple saw its status in the market, Thompson says:
No, we will not compete on price, we will offer something our competitors can't match. No, we are NOT selling a phone, we are selling an experience. No, we will not be cheap, but we will be cool. No, you in the tech press and on Wall Street do not understand Apple, but we believe that normal people love us, love our products, and will continue to buy, start to buy, or aspire to buy.
There is a debate to be had about whether Thompson has got this completely right - the 5C was priced at $100 less than the 5S, and came with contracts that reduced its price further to just $27 from some stores. But his broader point is true - Apple "will not be cheap."
Now contrast Thompson's characterisation with the words of Google SVPSundar Pichai said yesterday:
At Google, we've always worked hard at building products for everyone in the world. We try to look at technology and see if by using technology can we make a difference to a fundamental problem in people's lives. That's how we did Google search. Google search worked the same for everyone in the world, whether you were a rural kid in Indonesia or a professor at a world class research center, you had the same search results at your fingertips as long as you had access to a computer and connectivity.
... Each of these products today work at scale for everyone in the world and we are privileged to serve over a billion users for each of these products.
"Over a billion." Android sold about 1 billion phones last year, where Apple sold "only" 190 million, according to Statista:
One billion is lot of people, and the vast majority are using Google's services for free (search, email, maps etc.). And even those who pay are largely getting their Android phones at steep discounts to the iPhone.
Sure, the iPhone is nice. But Android is the most widely used computing platform on the planet, of all time. And it is free.
When historians look back, this will look like a huge achievement.
Business Insider has argued recently that the market is changing, and that as more people come online they demand better products and become willing to pay more. The iPhone 6 and 6 Plus is now taking market share from Android, and it appears that iPhone 6 may be fundamentally different from previous iPhones simply because it shifts momentum away from Android toward the iOS operating system.
Whatever happens, the battle will be fascinating.
Thompson concludes that Google has now chosen to work with - or at least on top of - Apple, by allowing its products to perform just as well on iPhone's iOS operating system as they do on Android. Free computer services for everyone, in other words, regardless of the device you chose to buy. The rich iPhone buyers will get the same stuff as the poor Android people. That universality - whether you're "a rural kid in Indonesia or a professor at a world class research center" - is what makes Google a continued threat to Apple, he says:
... far more dangerous is an obsession with bigness that results in your losing what you have, simply because you forgot why you have it.
Google finally remembers, and that reality, far more than Android, makes them a true long-term threat to Apple and everyone else.
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