Google vs. Apple--Battle of the Titans

The new Droid operating system by Google has raised a lot of interest in what this will mean to both Apple's I-Phone and RIM's Blackberry. Everyone keeps looking for the I-Phone "killer" the way people a decade ago looked for the Palm killer. What killed the Palm was the smartphone--a different category. The industry moved from the Palm, which was a PDA, to a smartphone, a convergence technology that combined PDA with mobile technology (phone and e-mail).

So, when people start looking for comparisons with what happened to Palm, they need to be cognizant of the fact that there was a category shift or a new category created. People stay within a category when their needs are being met. They switch only when they determine that the new offering provides greater benefits than they are receiving and the price of those benefits is worth it. In other words, there is value ("worth what's paid for").

Droid is not a new category. It is an operating system. I-Phone has its own operating system, as does Blackberry. However, we are talking about an operating system by Google, the most valuable and respected technology brand in the world--beating even Apple. We now have set up the "Battle of the Titans".

So, who is going to win and who is going to loose? My students have been asking me this since they first heard about Droid. So, here is my prediction and my rationale. I think that Droid will erode Blackberry, not I-Phone. I do not think that I-Phone users will switch, but there will likely be a significant number of Blackberry users who will. Droid is an improvement over Blackberry in many respects, although it will need to improve its e-mail functions to hurt Blackberry significantly.

Why will I-Phone continue to survive? This is no longer a matter of phone, but Apple brand. Apple has a community brand-- a "cult", similar to what we see in brands like Abercrombie and Fitch, Aeropostale, and the like. It is a reference group brand. We know that others are part of our same community because they have the same brand--it is entry into membership.

Google is loved as a search engine and one of the smartest companies around. I believe that Google will eventually use cloud technology to do to the technology space what Wal-Mart did to the retail space--many companies will become suppliers to Google. Google is becoming a brand beyond search engines the way Apple became a brand beyond computers.

Google will soon be selling its own branded mobile phones. It will create its own community. Blackberry has users; Apple and Google have community. Blackberry likely will be in trouble.

What does trouble mean? There are several things happening. First, there is what Boston Consulting Group calls the "market of three". That is, when an industry begins to mature, it devolves into three main players. Others either are squeezed out or become niche players. We also can look at this from a perceptual map and see the variables that drive mobile phone selection and map them. I think that Google and Apple will squeeze Blackberry into the middle, a dangerous place to be in any market--neither here nor there. Blackberry will remain the phone of choice for corporations, but for how long is the question. If Google is an accepted operating system, it will make inroads. To date, the CIOs in companies have resisted I-Phone, preferring Blackberry. How they react to Google and Droid will be interesting to watch. Clearly, there will be pressure coming from users to open the corporate market to another system. Younger users have wanted that to be I-Phone.

This is going to be an interesting battle between two very smart, very rich, very talented giants with incredible brand communities. I have talked with a number of people who are part of the "Apple community" who are starting to dislike Google because it threatens their beloved brand. We are likely to see battles between Google and Apple--the future Coke and Pepsi of the technology industry. Those caught in the middle, like Blackberry will be in a tougher position than ever.