Google's Chairman about Apple, Android and Smartphones

Tonight I attended the AllTHingsD event where Eric Schmidt, the executive chairman of Google, was interviewed. An abbreviated transcription is available online. Below I paraphrase Shmidt discussing a few topics and add some comments of my own.

Apple and Google Maps
One of the reasons given for Apple abandoning Google Maps was so Apple could get turn-by-turn navigation. Many people assume that Google wasn't willing to provide that feature for iOS.
However, when asked about this topic, Schmidt said that Google was willing to negotiate, but that Apple decided a long time ago that they wanted to build their own maps. That's why Apple purchased a couple of map-related companies, so there wasn't anything Google could do. Yet Apple didn't realize that it's really hard to make good maps.

This means that Apple probably went ahead with their own maps app not for the users' sake but because  because they  wanted to fight Google. While it may be that they can now provide better integration with the overall OS, it still seems like they made a mistake. However, the main complaints people have is faulty data, so that's not something that the Apple engineers messed up on, but their data provider. That also means it will take a long time to fix. However, I suspect it's not actually a big deal for most people in the US and that the Apple Maps app works fine navigating to almost any place.

Android vs iPhone
Schmidt said the Android-Apple fight is "the defining fight in the industry today" and the biggest platform fight ever. When asked about the PC-Mac fight, he said there are many more people than PC users, and the smartphone market will be able to tap into that market. He said 6 Billion people use phones, 1 Billion of which use smartphones, which will grow quickly. The phone or tablet is enough for people who aren't "information workers" who need access to a keyboard. This is a fight which Google feels they are leading. There are 4 times as many Android devices in use than iPhones and 1.3 Millions new Android activations each day. Schmidt stressed that the intense competition is good for the user and mentioned that it will bring down Apple's profit margins.

While it may be true that people in poorer countries may just get tablets or phone instead of laptops, I don't see that happening soon in the western world, where people are used to being able to type stuff. Even if it's just for email, I assume most people like being able to type, though maybe tablets will soon be good enough at that. What's interesting about the Apple-Google fight is how Apple makes ridiculous margins selling their devices, while Google doesn't make money directly from Android, and actually earns more in ads from iPhone users. Now that Apple isn't using Google for maps, one sees why it helps Google to have their own platform, though they probably wouldn't have lost Apple if they weren't such a direct competitor.

Hardware Integration, Motorola & Microsoft
Schmidt stressed how smartphones provide an integrated hardware-software experience that "just works", as opposed to the PC experience that Microsoft developed. He was generally pretty dismissive of Microsoft, feeling that they haven't been able to make it the new areas of technology. While Mossberg was all excited by the new tablets that Microsoft is creating (hardware and all), Schmidt didn't think that they would work well. He also felt it was fine just designing the hardware and letting other companies create it, like Google does with their Nexus tablets. When asked about Motorola, he said Google wouldn't give them any preference, because they don't want to harm the overall Android system.

While I trust them when they say they're keeping Motorola separate, it really raises the issue of why they bought them. They could probably get access to patents without buying an entire company, so what benefit do they get by owning one? It would make sense if they could now integrate devices better, but they say they're not planning on taking advantage of their ownership of Motorola. Also, couldn't Google make more money by giving preference to Motorola, even if it would cost them a few Samsung devices? Its not like they make so much money from other Android devices, while selling hardware has been very profitable for Apple and Samsung. Though Google is probably just focused on continuous software revenue rather than hardware revenue.

Stay tuned for the next post about Patents, Education and More!