In many people's eyes, the relationship between Google and Apple is like Coca-Cola and Pepsi, water and fire are totally incompatible. Consumers also vote with their feet when it comes to the products and services of the two companies, with iPhone, iOS, Apple Maps and Safari on one side and Pixel, Android, Google Maps and Chrome on the other. So it seems that both sides are indeed the main competitor to each other. But think about the redefined competition relationship of Michael Porter's ideas, inter-industry competition is only part of it. The real competition also takes into account the bargaining power of upstream and downstream and the threat of substitutes and new entrants. Building walls high and digging moats deep is the common strategy adopted by these two Silicon Valley giants. If you take a closer look, the difference between Apple and Google is still very obvious: one is a search engine giant, relying on data traffic to cash in; the other is a smart mobile device giant, relying on strong IP and a unique ecosystem to gain profits.
The search engine traffic cash requires consumers to conduct a lot of searches to push up the market share of the engine, which in turn makes businesses willing to launch various types of paid promotions and other businesses on the platform. On Apple's side, it is all about selling to increase the popularity and penetration of products and services. Here, the two companies found an opportunity to cooperate - Google pays Apple to set Google as the default search engine for its more than 1 billion iPhones, iMacs, iPads and other devices worldwide. In response, some also set the relationship between the two companies as Frenemies, the duo who love and torture each other. Moreover, the two companies have not been like water and fire from the beginning of their establishment. As early as 15 years ago, when Steve Jobs was leading Apple to make radical changes, Google's then-CEO Eric Schmidt even served on Apple's board of directors at the same time. At Apple's launch event, Schmidt ran up to the podium wearing his trademark American blue shirt and long tie, and jokingly said that the new name for the two companies after the merger would be "Applegoo". Although Google has since made a major push into Android, seemingly dismantling the former Silicon Valley Club, the partnership between the two companies in the default search engine has been retained to this day.
The exact amount of this cooperation, although no one outside knows, but according to predictions, is a sky-high price, about 8 to 12 billion U.S. dollars a year, or called one-third of the annual net profit of Google's parent company. And the one who made this prediction is the U.S. Department of Justice. To prevent companies like Apple and Google from dominating the market, the U.S. Department of Justice has launched one of the largest "public" versus "private" prosecutions since the 1990s, charging that the two sides' cooperation will affect consumers' right to choose their own search services, while joining forces to do Google has left only about 5 percent of its market share to other companies. The U.S. Department of Justice wants the two sides to immediately stop this cooperation is also the same as forcing the two sides to break up and divorce. Google is said to have made some internal preparations for the loss of Apple, and called the situation a "code red". If the red code really pop-up, then the possible results are: Apple will loss an important financial source, the stock price plummeted, and actively seek alternatives to Google or develop their own search engine; and Google's market share will gradually begin to be challenged, but the impact is limited, because the other half of the mobile operating system, called Android.
Apple and Google, the Monopolistic Couples in Silicon Valley