Apple Could Be About to Make a Huge Mistake

There's no stopping the Apple (Nasdaq: AAPL  ) rumor mill. This time, word is the Mac maker will remove Google's (Nasdaq: GOOG  ) YouTube app from the next edition of iOS.

Think of the consequences for users. With Apple refusing to support Flash on its mobile devices, that means a lot of popular streaming content could suddenly become unavailable to iFans. Is anyone else worried about this?

We don't yet know whether this is Apple's plan, though I doubt anyone would be surprised. The late Steve Jobs all but openly declared war on Android. Making it more difficult for Google to get its apps on iOS would make sense if Apple means to make good on Jobs' promise of vengeance.

Let's hope not. Apple would be deliberately fragmenting the market at precisely the wrong time. Right now, the iPad is arguably the best portable television ever. Just this month, the Mac maker brokered a deal with Amazon.com (Nasdaq: AMZN  ) that places its Instant Video service on the iPad.

Sources: Amazon.com, CNN.

Sources: Amazon.com, CNN.

And don't forget Apple TV. Netflix (Nasdaq: NFLX  ) has been a longtime content partner, but so has YouTube. Hulu just started supplying content to Apple's set-top box. Having both in addition to YouTube and (perhaps someday) Amazon could help the iEmpire establish dominance of the market for on-demand entertainment delivery.

By contrast, revoking YouTube's invite to the iOS party now would leave viewers without access to one of the Web's fastest-growing TV alternatives, a network in the making whose most popular custom properties rival some network television shows.

I'd reconsider whether to upgrade to an iPad were Apple to eliminate YouTube as a standard iOS option. Sure, I'd miss iTunes. But between Google Play rentals, Netflix, and YouTube's growing list of original programming, there's more than enough content to keep me entertained.

Even so, catering to personal tastes isn't the point. What is? Revenue. Apple is first and always a seller of hardware. Driving users to other platforms isn't good for business.

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Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team and the Motley Fool Supernova Odyssey I mission. He owned shares of Apple, Google, and Netflix at the time of publication. He also had a long-term call options position in Netflix. Check out Tim's Web home, portfolio holdings, and Foolish writings, or connect with him on Google+ or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.

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Read/Post Comments (8) | Recommend This Article (6)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On August 15, 2012, at 9:38 PM, mikewilson255 wrote:

    Mr. Beyers,

    You know that YouTube will still be available for a free download from the App Store, right? All of us who want it can easily get it. Your warnings are rather dumb!

    Mike

  • Report this Comment On August 15, 2012, at 10:08 PM, fatmonk wrote:

    @Mike, you can say it a dumbest of all.

    It is a none sense. Flash is dead on Mobile. it is all about money. Youtube is making money on viewers.

    more the 400million idevices out there. Major website switch to HTML5 video. Flash is slowly going aways. sounds likes Adobe was saying the same two years ago

  • Report this Comment On August 15, 2012, at 10:24 PM, taffey wrote:

    This story was obviously not fact-checked. Apple and Google have already both released statements about this. Apple's license has expired and Google is issuing its own standalone YouTube app. A simple Google search would have saved the author some time.

  • Report this Comment On August 16, 2012, at 3:46 AM, SuntanIronMan wrote:

    As mentioned, the YouTube app will be made available for download on the App Store.

    Also, you don't need the app to view YouTube content on your iDevice. You can just use Safari and the content will be played directly in the browser. The browser (mobile) version of YouTube is much better than the app version anyway.

  • Report this Comment On August 16, 2012, at 7:27 AM, melegross wrote:

    It's just as likely that Google decided to not renew the license. Google's needs are to monitize their software, and the Apple YouTube app doesn't do that—no Ads. Google's own app will, no doubt, have Ads.

    It must always be remembered that, first and foremost, Google is an advertising placement company. Until they added Motorola's sales to their own, 97% of their sales and profits came from Ads. That's their number, released in their quarterly reports.

    Apple's YouTube app contributed nothing to their bottom line. It isn't even certain whether Apple paid Google for the use, or whether Google paid Apple to get it on their devices.

  • Report this Comment On August 16, 2012, at 7:49 AM, jdmeck wrote:

    Don't know where you got your info, but the most publicized story is that the agreement expired. Google decided rather than a license agreement they would create the apps to run apple products.

  • Report this Comment On August 16, 2012, at 9:04 AM, stanleyliu2003 wrote:

    Who allowed you to write this article. This is the stupidest thing I've read in my entire life. I want to be compensated for the 5 minutes of my life I won't get back!!

  • Report this Comment On August 16, 2012, at 9:44 AM, TMFMileHigh wrote:

    Fools,

    Thanks for the comments. You're right; I missed the statement. Here is the original report from The Verge for those who missed it like I did:

    http://www.theverge.com/2012/8/6/3223775/apple-youtube-ios6

    I'm glad to see there will be a standalone YouTube app for iOS. Perhaps that will make it easier to create synchronicity across devices?

    Right now, I'm finding that it doesn't much matter whether I log in or not -- if I start something on YouTube in Safari and try to pick up where I left off on Apple TV, I can't. Not so on my Mac, where YouTube in Safari acts a lot like Netflix.

    Foolish best,

    Tim

    --

    Tim Beyers

    TMFMileHigh, Motley Fool Rule Breakers Analyst, Supernova Odyssey I Portfolio Contributor

    Web: http://timbeyers.me

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