Analysts Torn on Whether Google-Apple Competition Is Heating Up

When Google CEO Eric Schmidt stepped down from Apple's board of directors Aug. 3, it touched off a wellspring of questions.

How did it happen? Did Apple CEO Steve Jobs boot Schmidt, or was it a mutual decision to alleviate regulatory concerns? Maybe it was the Federal Communications Commission's inquiry into Apple's rejection of the Google Voice application.

Google and Apple compete in smartphone software and Web browsers, and will go head-to-head in computer operating systems next year. With the number of competitive markets between Google and Apple booming to three in the three years since Schmidt joined Apple's board, clearly something had to give.

So will this make the storied partners more competitive with each other? Opinions vary among high-tech analysts who cover the companies.

Analysts such as Rob Enderle, Enderle Group founder, believe Jobs pushed Schmidt out and so Schmidt will be seeking revenge on Apple.

"He was effectively fired, so I'd expect that would focus Google more tightly on Apple," Enderle told eWEEK. "This is probably a good thing for Google because it forces them to come up with a customer experience that possibly might exceed Microsoft’s as opposed to what they have been doing, which is something less."  

Sterling Market Intelligence analyst Greg Sterling, on the other hand, believes it was a mutual agreement, likely triggered by the FCC's inquiry into the Google Voice rejection combined with the Department of Justice's concern about the interlocking directorates provision in the Clayton Antitrust Act.

"The presence of Schmidt on the board may have created favoritism [toward Google] that has now been removed, but they're still on good terms," Sterling told eWEEK. "This isn't the beginning of some war between Google and Apple."

Technology Business Research analyst Ezra Gottheil told eWEEK he doesn't see Schmidt's removal from Apple's board changing anything between Google and Apple. "It's simply a recognition of something that's become increasingly clear—that the two companies are already competing in smartphone operating systems, and will be competing in PC operating systems."