That was my first thought after seeing the news that Google CEO Dr Eric Schmidt is leaving the Apple board. Steve Jobs:
Unfortunately, as Google enters more of Apple’s core businesses, with Android and now Chrome OS, Eric’s effectiveness as an Apple Board member will be significantly diminished, since he will have to recuse himself from even larger portions of our meetings due to potential conflicts of interest. Therefore, we have mutually decided that now is the right time for Eric to resign his position on Apple’s Board.
I realise that we are more used to the idea that Apple is Microsoft’s polar opposite. Apple has design and beautiful hardware, Microsoft has OEM’s with their model-a-minute systems that are never quite right. Apple has iPhone which everyone wants, Microsoft has Windows Mobile which everyone puts up with (if they don’t have an iPhone). Apple has iPod which everyone uses, Microsoft has Zune which nobody uses. And so on.
Nevertheless, Apple and Microsoft are companies from the same era, and they both make most of their money by constantly upgrading the client and persuading us to buy into the latest version. Although Apple has some investment in the cloud, with Mobile Me and more importantly the App Store, these exist primarily to support its client devices.
Google on the other hand is invested in the cloud. Projects like Android and Chrome OS may run on the client, but they are not profit centres in themselves – they exist to promote Google’s web-based services (see Google Chrome OS – the Web’s the thing). It is important for Google to make these investments, as without them the client-centric giants (Apple and Microsoft) have too much power to impair web-based computing in favour of the old model.
Recently Apple has been been making life miserable for App Store developers by denying applications that compete with built-in iPhone features – most visibly in the case of Google Voice. Unfortunately by protecting the iPhone in this way Apple is diminishing its usefulness in the cloud era.
Apple is not quite like Microsoft. Apple can grow by taking market share from Microsoft, whereas it is harder for Microsoft to do the reverse (though Windows 7 is a good attempt). Apple can make more inroads into business computing. It can broaden the market for the iPhone by making a wider range of device and lowering the price of entry, as it did with the iPod. The digital home is another promising market.
On the other hand, Microsoft has more of a cloud platform than Apple. Microsoft has Bing-Yahoo search, Hotmail and Messenger, Windows Azure and Silverlight. It has failed so far, but in theory it could build this into a viable alternative to Google.
Still, now that Apple and Google have started to break their alliance and openly compete, it’s clear that Apple and Microsoft are on the same side of a great divide, with Google on the other.