Apple CEO Steve Jobs said a lot of interesting things on stage at AllThingsDigital’s D8 conference June 1, but it’s what he said about search that has pricked up the ears of some financial analysts.
Jobs swatted aside a couple of search-related rumors. He asserted that Apple is not interested in going into the search business or dropping Google on its iPhone and iPad in favor of Microsoft’s Bing.
Specifically, when asked about Apple’s recent purchase of semantic search company Siri, Jobs said Siri was an artificial intelligence company, not a search company and noted, “We have no plans to go into the search business. We don’t care about it-other people do it well.” Asked about whether he would remove Google from the iPhone or iPad, Jobs said no.
Those statements come after rumors that Apple was formulating a deal with Microsoft to replace Google as the default search provider on its iPhone and iPad with Bing, or at least offer Bing as an option on those devices. Jobs could make such an announcement at the Apple developer conference next week.
Broadpoint AmTech analyst Ben Schachter indicated Jobs’ comments should come as music to the ears of investors fearful that Apple might try to open a new battle front with Google in search.
“It is hard to interpret such comments as anything but a positive for Google,” Schachter wrote in a research note June 3.
“We had been concerned that Apple might not just remove Google from Apple products, but that Apple could attempt to compete more directly with Google on search either through a proxy such as Microsoft or through the Yahoo strategy of focusing on the user interface of search and partnering with Microsoft for the indexing. … If Jobs says that there are no plans to go into search, we take him at his word.”
Search expert John Battelle doesn’t believe the conversation is as cut and dry as Jobs made it sound.
In a June 2 blog post, Battelle explained how Apple will indeed offer search, just not the classic Web search platform consumers are used to from Google, Yahoo and Bing.
He believes Apple will forge a vertical search platform for the mobile applications his company sells for its iPhone and iPad.
Such an offering would be a boon at a time when users are struggling to find what the right applications in Apple’s App Store, which boasts more than 200,000 apps.
“Apple will do search,” Battelle said. “It won’t be search as we understand it on the Web, but it’ll be search for AppWorld, and if done right, it will be extremely profitable.”
Battelle, who argues that we need to rethink how we view search, isn’t alone in this sentiment. Piper Jaffray analyst Gene Munster wrote in a March 30 research note that Apple must build a special search engine to shield its application data from Google and others on the Web.
Apple may not be kicking Google search and other apps off of its iPhone or iPad, but it could construct a walled garden around its app data that could crimp Google’s mobile ad plans for those popular devices.
In the meantime, there are already plenty of places for Apple to compete with Google in the mobile sector and that rivalry will heat up next week, when Apple is expected to launch the iPhone 4.0 and iAd platform at its developer conference.
These products will pose significant challenges to Google’s Android, AdMob and AdSense for mobile platforms.