Forget Microsoft, it’s all about Google vs Apple

IN recent decades, the technology sector has been defined by a clash of titans. In the 1980s Microsoft took on Apple and ended up wiping the floor with it, a feat it repeated with IBM in the 1990s. But Bill Gates couldn’t make it a hat trick; when the firm tried to thwart Google in the noughties, it was trounced.

It was a defeat that Microsoft is unlikely to recover from. The next ten years will be dominated by a battle between Google and Apple, erstwhile friends that are on course to become bitter foes.

Until recently, the businesses of Apple and Google have been largely complementary. But when Google launched its Chrome web browser and operating system, which competes with Apple’s Safari and Mac OS X, as well as its Android mobile phone software, it was clear the friendship would soon end.

Last August, Google boss Eric Schmidt quit as an Apple director because he had to keep on excusing himself from the boardroom; there were simply too many areas where the pair were competing.

Google’s biggest threat to Apple so far is its smartphone, the Nexus One, which was launched with much fanfare earlier this week. The unveiling of the device mightn’t have generated the same amount of hype as a new iPod or iPhone, but it came close.

Early indications suggest that the Nexus (pictured) is the most serious contender to the iPhone yet, especially as it will work seamlessly with Google’s suite of excellent mobile applications.

The web giant is also hoping that the phone will help establish the Google brand as the first port-of-call for smartphone users, allowing it to dominate a potentially lucrative mobile advertising market.

Apple is responding to Google’s offensive with a counterattack, and has started pitching its tents on ground previously occupied by its new rival. Earlier this week it spent $250m (£157m) on Quattro Wireless, a mobile advertising network that competes with AdMob, which was in turn bought by Google for $750m at the end of last year.

Quattro is hardly a massive acquisition, but it is notable because it is such a huge departure for Apple. It too thinks that advertising on the mobile phone is an untapped goldmine, and that its huge influence in the mobile apps space is the perfect platform to exploit it.

Analysts are obsessed with which stock will outperform the other in the near future, especially as both have similar market caps of around $190bn. But it’s probably worth picking both, as the increased rivalry is sure to spur them on. As Microsoft has proved, too long without a credible competitor can leave you unprepared for the fight when it does come along.

The real losers will be the likes of Nokia, Yahoo and Microsoft, has-beens from a decade past whose demise will be a sideshow to the main event: Google vs Apple.