Who pays whom?

Apple and Google - 2 technology giants!!! They work with each other and against each other.

3 interesting stories. Connect the dots!

Story 1 - Apple clearly understands what it is good at, and what it can’t be, and leverages partnerships basis that in a very strategic way.

There were rumours a couple of years ago that Apple was developing its own search engine. At some point in time, they abandoned the idea because they realised that they will never be as good as Google in search. I’m sure somewhere in their laboratory today, they have a fully developed search engine, which they can launch with just a flip of a switch. But they didn’t. They decided to leverage Google.

Today Google pays Apple $18 billion a year to remain as the primary search engine on their device. This is purely a function of reach. For Google to be dominant in the market, it needs to be default on the 2.5 billion devices out there by Apple. But it is a double win situation for Apple! They don’t have to create, maintain, manage and compete with a search giant. And they get paid a hefty sum of money every year because of the strength of distribution.

Story 2 - When the first iPhone launched in 2007 Apple collaborated with Google in Maps. At that time, both companies had parallel goals: Apple wanted to establish a foothold in the mobile industry, while Google aimed to expand its user base in the mobile space. But as Android gained prominence, Google started offering superior map services, including turn-by-turn navigation and vector graphics, which were not available on iOS.

Apple paid Google for access to the Google Maps API, and both companies had a revenue-sharing arrangement for ads shown on maps. By dropping Google Maps, Apple lost access to location and driving data from iOS users, but it gained independence and control over its mapping service

Apple decided to take this challenge head on. This was a clear shift in strategy to be able to have more control over the user experience. They created something which they could compete against Google. I use Apple maps actively. While it was a disaster, a couple of years ago, today, undoubtedly, Apple maps, beats Google maps, hands down in terms of amazing experience. Especially in a country like India, Google Map’s sucks big time.

Story 3 - The latest news is that Apple and Google are collaborating to have Google AI built into Apple devices.

So my question is who pays whom?

And what's Apples strategic move now? Apple has invested heavily in AI over the last year. So much so that it has acquired nearly 32 AI companies last year. That’s almost 3 companies a month! Is Apple going to pay Google, because they know they suck at Siri, and they had years to compete, but they have lost the AI battle. Or does Google pay Apple because it is got that same $2.5 billion distribution reach. Is this a short term partnership with Apple having a long term parallel strategy. Will ever Apple take Google head on in the future?

Welcome to the beginning of an exciting future….