March 2010 – Channel Crossing: Mobile

The Battle to Shape the Future of Mobile Computing

Apple and Google are engaged in an epic battle to profit from mobile computing, as mobile phones become the computers of the future, according to a recent article in BusinessWeek. These two companies are similar in many ways. Both are admired by consumers, they each have over $20 billion available for research, product development and acquisitions, visionary founders, competing smartphones, web browsers, music and tablet computers, which positions them as major rivals moving forward.

Google became a direct competitor to Apple’s iPhone with the recent introduction of its Nexus One smartphone that utilizes Google’s Android operating system. Apple recently purchased Quattro, which specializes in mobile advertising that targets consumers based on their behavior, after being outbid by Google for mobile ad company AdMob. With the acquisition of Quattro, Apple is aiming to make the current form of mobile search obsolete by developing new types of mobile ads.

MOBILE MARKETSHARE
Steve Jobs is trying to revolutionize mobile advertising the same way he changed music players and phones. One way he could accomplish this is by using Apple’s geo-location technology to deliver ads that are relevant to your location. Apple also has access to valuable consumer information, including which apps, videos and songs mobile users downloaded and detailed customer data such as credit card numbers and home addresses that will allow them to combine advertising and e-commerce in new ways, per BW.

It’s predicted that within five years, more people will access the Internet through mobile devices than through desktop PCs. Mobile advertising today is only $2 billion compared to the $60 billion online ad market. Mobile search is still in its infancy, but it will account for 23 percent of all searches in 2016, up from 5 percent today. So there’s potential for Google and Apple to tap into billions of dollars in revenue through the sales of mobile phones, software, ads, apps and services as the mobile market grows.

The key to success is through Google or Apple figuring out a way to make mobile more profitable by winning the mobile ad battle and sharing the revenue with app developers. “The mobile platform that creates the most ways to make money wins,” noted David Hyman, CEO of MOG, in BusinessWeek. Apple has a big lead over Google with 125,000 apps developed for Apple devices vs. only 18,000 for Android devices.

Google CEO Eric Schmidt believes that mobile ads will become more important than PC advertising because of the personalization and localization, according to BW. Schmidt speculates that mobile phones might one day be free with advertising paying the way. “If Google could do that, they would be untouchable. Apple wouldn’t be able to come up with an answer for that,” commented technology consultant John Metcalfe to BW.

The rivalry between Google and Apple should be fascinating to watch as these two technology titans battle to dominate the mobile computing space in the years to come.

Peter Koeppel is president of Koeppel Direct, a full-service media buying agency based in Dallas. He can be reached at 972-732-6110 or online at pkoeppel@koeppelinc.com or twitter.com/DRTVBUYER.