iPhone News Updated

Google versus Apple

The rivalry between Apple and Google intensified Tuesday as the Silicon Valley giants pushed into each other’s home turf.

In separate developments, Apple - an icon of consumer electronics - bought a mobile-advertising startup, while online ad king Google began selling its own smart phone.

Apple is “on path to collide with Google,” said analyst Tim Bajarin of Creative Strategies Inc. in Campbell.

And with a Google-branded phone “aimed directly at the iPhone, Google could clearly become one of Apple’s biggest rivals in the future.”

Google unveiled its much-anticipated Nexus One “superphone” at a packed news conference Tuesday morning in its Mountain View headquarters. Although Google’s Android operating system has powered smart phones such as Motorola’s Droid since last year, this is the first time Google has taken a page out of Apple’s playbook and attempted to sell a consumer electronics device directly to the public.

Pushing back

Some experts see the Nexus One, which went on sale online Tuesday, as the first real challenge to the market-dominating iPhone. Apple has sold more than 30 million iPhones since 2007.

But other analysts said Apple’s first foray into advertising sales with its purchase of Quattro Wireless is a sign Apple is preparing to push back at Google in a battle for ad dollars on those same iPhones and Nexus Ones, and in the future, tablet computers.

The Waltham, Mass., firm places about 4 million ad impressions a month on mobile phones. Its clients include large corporations such as Ford, Procter & Gamble and Visa.

Quattro co-founder and chief executive Andy Miller announced the deal on the company Web site using his new title - vice president for mobile advertising for Apple.

“We remain focused on delivering more engaging, relevant and useful ads to mobile devices, and improving the measurement and execution of digital campaigns,” Miller wrote. “Together with Apple, we look forward to developing exciting new opportunities in the future that will benefit our customers.”

Details vague

Financial terms of the deal were not disclosed. Analyst Julie Ask said the deal helps Apple counter Google’s November purchase of Quattro rival AdMob for $750 million.

Apple reportedly also tried to buy AdMob but acquired Quattro for half the amount Google paid, said Ask, a vice president with Forrester Research.

“This is more about positioning themselves for future growth,” Ask said.

Both Quattro and AdMob provide platforms for ads on mobile devices, and AdMob is making “a ton of money” through Apple’s huge ecosystem of iPhone and iPod Touch applications, Ask said.

Apple announced Tuesday that more than 3 million apps have been downloaded in just 18 months, while Google is looking for growth in the app market for Android-based phones.

And those stakes are growing: According to Forrester, the U.S. mobile-ad market will grow from $391 million in 2009 to $1.27 billion in 2014.

Part of that market is fueled by shifting consumer habits - accelerated by the iPhone - that rely less on computers and laptops and more on smart phones for Web tasks such as e-mail, text messaging, social networking and surfing.

“By Apple buying Quattro, it brings a brand-new powerhouse into the market,” said Krishna Subramanian, co-founder of mobile-ad company Mobclix Inc. of Palo Alto.

Analyst Rob Enderle of Enderle Group said relations between Google and Apple have hardened since August, when Google chief executive Eric Schmidt stepped down from his seat on Apple’s board of directors because of conflicts of interest.

Drawing lines

Apple CEO Steve Jobs said at the time that Schmidt’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.”

The companies have also clashed over Apple’s blocking software for Google Voice from its iPhone, which sparked an inquiry by the Federal Communications Commission.

Enderle believes Schmidt was pushed out. Now Google has a phone that is “quite literally designed to break the iPhone,” he said. “It’s more of the anti-iPhone than the Droid was.”

And with the Quattro deal, “clearly Apple is pushing back in much the same way. That’s clearly Google’s space. That’s not something you would think was traditionally Apple.”

[Thanks: http://www.sfgate.com]

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