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10/11/2012
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Schmidt Dishes On Google-Apple Battle Royale

Google's and Apple's smartphone platform war is much more important than the war between Apple's and Microsoft's desktop platforms, says Google CEO Eric Schmidt.

Apple iOS 6: 10 Most Interesting Features
Apple iOS 6: 10 Most Interesting Features
(click image for larger view and for slideshow)
Google Chairman Eric Schmidt has plenty to say about his company's smartphone fight with Apple. During an interview with AllThingsD's Walt Mossberg and Kara Swisher, Schmidt said, "The Android-Apple platform fight is the defining fight in the industry today. We've not seen platform fights at this scale."

Google and Apple are battling around the world for domination in the smartphone market. Google is winning. The rate of Android adoption has soared past that of Apple's iOS platform and iPhone. Google already activates 1.3 million Android devices per day, and has 500 million total devices in the market. Apple has 400 million iOS devices, including iPods and iPads. Google believes it will reach a total of 1 billion deployed Android devices within 12 months.

This is good news for consumers, noted Schmidt. "The beneficiary is you guys. Prices are dropping rapidly. That's a wonderful value proposition," he said.

A high-end smartphone typically costs $200 when purchased with a new wireless service agreement. Mid-range models often cost $100 or less, and entry-level smartphones can be picked up for free on contract. There's no doubt that prices of handsets are going down. (The cost of wireless service plans, however, that's a different story.)

[ Google keeps improving Android. Read Google Android Update To Add Rotating Home Screen. ]

But Schmidt hates the patent lawsuits that have been filed between Apple and Android device makers around the globe. "These patent wars are death," he said. "I think this is ultimately bad, bad for innovation. It eliminates choices."

In particular, Apple is at war with competitor Samsung over smartphone patents. Apple was awarded a $1 billion judgment against Samsung earlier this year over patent violations. Devices have been banned in the U.S. and abroad, and many cases are still pending. The patents wars haven't slowed down one bit in the last 18 months, and only threaten to intensify.

While larger companies such as these are able to protect their intellectual property, Schmidt thinks the smaller companies will feel more pain when it comes to patent fights.

Perhaps most interesting is that Schmidt thinks smartphones can replace full PCs for some people. "The phone user population is six billion, one billion smartphone users," he said. "That's much bigger than the PC industry--maybe a billion, 1.5 billion installed. Every month, quarter, year, the growth rate of mobile adoption exceeds everyone's expectations. The phones become so useful that it's good enough for normal people in lieu of a PC, for day-to-day events."

This year has (so far) seen the first-ever decline in PC sales. The year isn't over yet, but the data is trending downward. Is this because of smartphone proliferation, or tablets? Is the market finally saturated? Schmidt didn't speculate.

He did, however, chastise Apple for dropping Google Maps from iOS.

"The fact of the matter is [Apple] decided a long time ago to do their own maps, and we saw this coming with their acquisitions, said Schmidt. "I think Apple has learned that maps are hard. We invested hundreds of millions of dollars in satellite work, airplane work, drive-by work, and we think we have the best product in the industry."

Apple has since apologized for the poor performance of its own map app. It is working to improve the app.

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