3 Reasons Apple Will Make Microsoft Bing The Default iPhone Search Engine
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Talks between Apple and Microsoft to bring Bing to the iPhone have been underway for weeks, BusinessWeek reported. What's more, BusinessWeek quotes one of the people familiar with the talks as saying that both Apple and Microsoft view Google as their primary enemy.
Here's 3 reasons why Apple will make Microsoft Bing the default search engine on its iPhone Safari Web browser.
1. Apple Will Make Big Royalties From A Microsoft Bing iPhone Deal
The biggest reason that Apple is going to make Microsoft Bing the default search engine on the iPhone's Safari Web browser is cold, hard cash. Look for Apple to make the same kind of margin-rich, profit-driving deal with Microsoft that it made when it anointed AT&T the exclusive iPhone carrier in the U.S.
Apple CEO Steve Jobs is the king of high-margin deals that drive net income gains for Apple. Jobs' deal to make AT&T the exclusive iPhone carrier in the U.S. is the equivalent of rigging a slot machine in Las Vegas. To say it is a deal like none other in the telecom market is an understatement.
Apple is taking an unprecedented portion of the subscriber fees from that AT&T contract. And that is just what Apple is going to do when it makes Bing the exclusive default search engine on the iPhone's Safari Web browser.
2. Google Nexus One Is Now The Chief Rival To The Apple iPhone
Google threw down the gauntlet with Apple when it launched the Nexus One smartphone this month. Google Android-based Nexus One is the biggest threat -- bar none -- to Apple's iPhone dominance in the smartphone market.
Ironically, Google is playing the Microsoft card with the Nexus One, attempting to bring scale and standardization to the smartphone market the same way that Microsoft did in the PC market with DOS and then the Windows operating system.
It's all about making the smartphone cheaper and available to more users so Google can make more money from users searching the Web from mobile devices. It's the oldest mass market game in the world: Give away the razor, and sell them the razor blades.
Don't think it doesn't stick in Jobs' craw that Google CEO Eric Schmidt had the audacity to sit on the Apple board at the very time Google was laying the groundwork to launch its Nexus One iPhone competitor. File this Apple Microsoft deal under Jobs' Google revenge.
3. Apple And Microsoft View Google As Their Biggest Threat
The fact is both Apple and Microsoft view Google as the biggest threat to increasing their sales and profits. It's a case of the enemy of my enemy is my friend.
Apple fears that Google Nexus One will take a huge bite out of its lucrative smartphone market share. Jobs looks at Nexus One and sees plunging iPhone profits. Google figures it could give away the Nexus One and make all its profits from mobile ad search. Ads are the Google franchise. Not Smartphones. The smartphone is simply a device that it wants to put in the hands of every person on the planet to drive more mobile ad revenue.
Microsoft, meanwhile, sees Google Apps eating away day after day at its high-margin Microsoft Office business. Google's cloud goal is to make Microsoft irrelevant. And it's doing a good job of making that happen. The blockbuster $7.25 million deal by Google, along with systems integrator CSC, to move 30,000 City of Los Angeles employees to Google Apps is Microsoft's worst nightmare come true. Microsoft put a full court press on to stop the City of L.A. deal but failed. This is the kind of deal that causes sleepless nights for Microsoft CEO Steve Ballmer.
Google is giving both Apple and Microsoft fits. Now Apple and Microsoft figure they can give Google a five-star migraine by making Bing the default search engine on the iPhone.