Google CEO Eric Schmidt Resigns from Apple's Board

By Clint Boulton  |  Posted 2009-08-03

Google CEO Eric Schmidt Resigns from Apple's Board

Apple CEO Steve Jobs said that Google CEO Eric Schmidt has resigned from Apple's board of directors, citing the fact that Google's Android mobile operating system and forthcoming Chrome operating system compete with Apple's iPhone and Mac OS X desktop computing OS, respectively.

Jobs said in a statement Aug. 3:

"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."

Schmidt said in a statement, "I have very much enjoyed my time on the Apple board," adding, "It's a fantastic company. But as Apple explained today we've agreed it makes sense for me to step down now."

Schmidt, who had said he would not step down because he didn't view the companies as competing, had held a seat on Apple's board since August 2006. This union of Google and Apple had been seen by Google and Apple fans as a countermeasure to Microsoft, the desktop computing software market leader.

Still, antitrust experts have questioned this stance, noting that Google and Apple are increasingly competing in mobile and desktop computing segments.

Enderle Group analyst Rob Enderle told eWEEK:

"Eric Schmidt has a problem that I think strikes many CEOs; he is enthralled with his newfound celebrity. At Sun and Novell, no one really cared that much about him, and now at Google he is a star. The Apple board seat was one of the perks of being a star, and he didn't want to give it up; it is like being a member of a very exclusive club and you get to rub elbows with Al Gore, another celebrity. Steve Jobs was out and still not at full health and was simply not in a position to force the issue, and I doubt anyone else has the power to force a board change at Apple. He should have resigned for conflict issues as soon as Google decided to enter Apple's space; the iPhone is strategic after all."   

But the timing of this move is curious. Android has been in the market on the T-Mobile G1 smartphone since last October, but with just about 1.5 million G1s shipped, the phone is hardly seen as a major threat to the iPhone, which has sold millions. The T-Mobile myTouch 3G powered by Google launches this Wednesday.

Google unveiled the Chrome OS in July, but that OS is still possibly a year away from appearing on netbooks.

One possible reason for the sudden move has nothing to do with either Android or Chrome OS. Google and Apple have become embroiled in a battle of competing smartphone applications in recent weeks.

The Google Voice Debacle

On July 31, the Federal Communications Commission sent letters to Google, Apple and AT&T inquiring why Apple rejected the Google Voice application from its iPhone App Store.

Google Voice is a Web-based call management application offering free SMS and inexpensive international calls. Apple rejected it from its App Store market for iPhone applications several weeks ago, but it was only when third-party Google Voice apps such as GV Mobile and VoiceCentral were unceremoniously booted from the App Store last week that the issue surfaced.

An Apple spokesperson told the third-party programmers that their apps were punted for having features that competed with the iPhone. However, when pressed for more information, the spokesperson stonewalled the developers. Google also did not provide clarity as to why Apple did not accept Google Voice.

Some thought Apple partner and lone iPhone AT&T was the culprit for the Google Voice freeze-out, but AT&T only referred inquirers back to Apple. Programmers, journalists and bloggers wrote about the situation, with some such as TechCrunch's Michael Arrington and Mac developer Steve Frank promising to shelve their iPhones for other smartphones.

IPhone and Google Voice users commented on the situation en masse.

Most people seem to believe Apple and AT&T are in collusion to freeze out rivals in a ferociously competitive market for mobile and wireless applications. Others believe it is a situation where Apple has the right to defend its iPhone from competing products.

Whatever the case, the FCC is determined to get to the bottom of the matter. James D. Schlichting, acting chief of the wireless telecommunications bureau of the FCC, penned detailed questions for Google, Apple and AT&T. He wants to know why Apple banned Google Voice; whether or not AT&T was consulted in the matter; and how Apple decides to reject or discontinue certain apps in its App Store, among other things.

The broader issue is that applications programmed for wireless devices don't follow the same rules of the road as those written for desktop computing appliances. Any app will work on a computer, but carriers such as Verizon and AT&T tightly control what phones are used on their networks, as well as what apps will work on them.

This race over competitive advantages hurts the consumer. Now with Schmidt gone from Apple's board, the world can expect to see competition between Google and Apple go full throttle.

Enderle told eWEEK: "The FCC letter clearly forced the issue."

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