Print 21 comment(s) - last by Tony Swash.. on Mar 15 at 2:56 PM

The FTC has subpoenaed Apple looking for documents that contain agreements between Apple and Google regarding Apple's mobile devices using Google services

Apple was recently subpoenaed by the U.S. Federal Trade Commission for information on its use of the Google search engine as the default on iPhones and iPads.

Apple and Google have a bit of a strange relationship. The two shared board members over the last decade, including Eric Schmidt. They were connected this way for a period of time until Google developed the Android mobile operating system to compete with the iPhone.

The FTC began investigating the sharing of board members in 2009 and whether it violated antitrust laws, and Schmidt ended up leaving the board that same year. From there, rivalry between the two has heightened due to Apple launching lawsuits against phone makers like Samsung, HTC and Motorola, who run Android on their phones.

Just last year, the FTC started investigating Google in an effort to find whether the company increases advertising rates for competitors unfairly and ranks search results to benefit its own businesses. Now, the FTC is pulling Apple into the equation regarding its default settings, which includes the Google search engine.

Apple has had Google as the default search setting since the iPhone launched in 2007 and since the iPad originally released in 2010. Google Maps is also used on both of these devices over any other map service.

The FTC is also curious as to whether Google is purposely stifling competition by partnering with Apple to keep Android and iOS in the top ranks of the mobile realm.

The FTC has subpoenaed Apple looking for documents that contain agreements between Apple and Google regarding Apple's mobile devices using Google services. It hopes to uncover details regarding their relationship and whether Google is using Apple's devices to crush competition unfairly.

"As mobile search gets more widespread, the default setting becomes more significant," said Allen Grunes, an antitrust lawyer at Brownstein Hyatt Farber Schreck LLP.

According to comScore, an Internet market research firm, Google took the top spot in Internet search in February 2012 with 66.4 percent of the market. By the end of last year, Apple had sold 183 million iPhones and 55 million iPads. The two coming together could surely take over the market, as they already have to an extent.

Source: Bloomberg

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RE: Not quite accurate
By Tony Swash on 3/14/2012 8:01:48 PM , Rating: -1
You obviously do not understand Google. Android is not meant to make money. It is meant to
a) Ensure that mobile advertising is not controlled by someone like Apple, and
b) Provide a platform for Google to expand search, location, mapping and other services in to mobile realm (along with all the money-making advertising that comes attached to these).
It has been hugely successful, and mobile revenue is growing on a hockey-stick-like curve.

No it isn't. Google refuses to break out Android revenues and that in itself is a bit of a give away.

We know that late last year Larry Page said publicly that Google's mobile revenue had a 'run rate' of $2.5 billion. I take that to mean that it hadn't actually achieved an annual revenue income of 2.5 billion but if one projected recent income over the course of a year then Google will be achieving 2.5 billion in mobile income at some point in the near future, presumably this coming year. That means that total mobile revenue will account for about 6.5% of Google's revenue.

We also know that as part of the Senate Judiciary hearings in September 2011, Susan Creighton from Google, testified under oath that 2/3rds of Google's mobile search comes from Apple iOS devices. So it's reasonable to assume that of the 2.5 billion revenue from mobile about $1.6 billion comes from Apple devices and, if we assume all the rest comes from Android, that means about $833 million revenue comes from Android. It's worth noting that is recently reported that Google pays Apple about $1 billion a year to keep Google as the default search engine on iOS devices.

So after spending all it has on Android development and after after spending 12.5 billion on Motorola, Google is getting about 2% of it's income from Android.

Android seems a pathetic business failure for Google. All that effort and so little to show for it.

It's also worth noting that Android has been on the whole (and with the notable exception of Samsung) a business failure for the Android OEMs, who are all losing money or barely breaking even. It is also not very good for developers who make about ten times as much money from iOS as they do from Android.

Even the one maker of an Android tablet that is selling in quantity, the Amazon Fire, is selling the device at a loss and excludes many Google services.

RE: Not quite accurate
By zozzlhandler on 3/14/2012 8:47:40 PM , Rating: 2
Glad you know so much more about Google than I do. But I think you are wrong. Look again at the two purposes for Android I stated. Also, I think a run-rate of $1 billion is not a failure. The trend was towards *very* rapid increase. There are also many other sources of revenue (app sales, payments, ...). Android is a strategic platform for Google, and it is only a few years old. As far as I can see, you armchair CEOs have no clue whatsoever. Google can think very long term, because their revenue stream allows them to. But Android is already a success, and growing into a bigger one. Admittedly, Apple is more successful in this area, due to superb products and execution. They may continue to succeed, or they may not. Things change very rapidly in this industry. But calling Android a failure at this stage is just dumb.

RE: Not quite accurate
By Tony Swash on 3/15/12, Rating: 0
RE: Not quite accurate
By Magnus909 on 3/14/2012 9:48:00 PM , Rating: 2
That means that total mobile revenue will account for about 6.5% of Google's revenue.

It's all about keeping people in the ecosystem.
Android ad revenue in itself may not be the greatest for google, but the extreme integration into google services will mean that more people use google services on other devices (desktop pc;s, laptops and so on), which means better targetting of ads and more exposure to ads which in turn means better revenue for google on the whole.
Most people will probably be logged in to google all the time on the pc. Many using services other than just gmail, like calendar, maps, youtube, picasa, google plus, documents and so on logged in to google all the time generating more ad revenue and tracking user behavior (meaning even better ads targeting). And the tracking of course also take place in the android phones themselves...
That means that android indirectly leads to better revenue for google in a way that is harder to measure.

Even the one maker of an Android tablet that is selling in quantity, the Amazon Fire, is selling the device at a loss and excludes many Google services.

This is even more about "keeping people in the ecosystem" which is the Amazon store. It's all about selling the cheapest possible device even at a loss (used also for Xbox360 and playstation 3 in their first years).
It's about selling books, films, loads of gadgets and so on in the amazon store in the end.
That is also hard to measure since many probably also will buy more from the amazon store with other devices (like a normal pc) than the Amazon fire.

But I got to admit (reluctantly) that Apple is a monster money making machine. Very focused and keeping the "hype" alive, but I wonder what will happen in the long run when the flood of android devices of all kinds in all areas (tv;s and other devices) finally makes it impossible for apple to keep up.
It's just a matter of time before the apps in the android market generate more in total sales due to sheer volume, even if every user spends much less on apps for android.

Theres also the additional advantage of developers to get their apps released even in the beta stage compared to submitting to the appstore and wating for permission already means that some apps are released first for android and I think that also will be more common in the coming years.

“We do believe we have a moral responsibility to keep porn off the iPhone.” -- Steve Jobs

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