Apple, Inc. Quietly Declares Search War on Google

Throughout Apple's (NASDAQ: AAPL  ) WWDC keynote yesterday, the Mac maker highlighted various ways that it's bolstering its search capabilities. More importantly, Microsoft's  (NASDAQ: MSFT  ) Bing continues to get more and more love from Cupertino, as it will power Spotlight's web search. This comes as Apple transitioned Siri's search to Bing last year. Google  (NASDAQ: GOOG  ) (NASDAQ: GOOGL  ) remains the default search provider in Safari, so it still enjoys the dominant distribution channel given current usage patterns.

One step at a time, Apple continues to slowly move away from Google for search wherever possible. For now, Apple is likely stuck in a long-term contract with Google, but it seems feasible that Apple may want to ditch Google in the long term. It has already shifted away from other Google services such as Google Maps.

Bing has made gains in domestic market share, and that upward trend could continue with Apple's help. Apple owns the front-end interface and Bing powers the back-end, so this war is taking place behind the scenes.

Ultimately, the consumer will have a say, though, as Apple always wants to offer the best product. If consumers still feel that Google is a superior search engine, which is likely the current perception, then Apple will need to respect those preferences.

In this segment of Tech Teardown, Erin Kennedy discusses Apple and search with Evan Niu, CFA.

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  • Report this Comment On June 04, 2014, at 1:20 PM, RussellL wrote:

    For computer operating systems, OSX always had less than 15% marketshare. So at best, Spotlight search could never have more than 15% search marketshare.

    Plus, only the very latest machines are supported by Yosemite which makes the 15% even smaller.

    Is that really going to hurt Google? I think not.

  • Report this Comment On June 04, 2014, at 1:34 PM, twolf2919 wrote:

    A "war" implies two antagonists fighting over something. Presumably that something is "search" here. But how can Apple be declaring a war over "search" when it doesn't have a search engine?

    All Apple is doing it diversifying where it can. Apple doesn't want to depend on Google - a competitor in the smartphone arena - as its primary (much less only) Internet search provider. Apple learned its lesson from Maps - where Google tried to force terms on Apple for continued use of Google Maps data. As Apple's only Maps provider, Apple was cornered - either accede to Google's terms or build its own Maps solution. It chose the latter - but had to rush it to market as a result.

    On the financial side of things, Apple actually gets quite a bit of money from Google for sending searches its way ($1b/year?). Perhaps Bing is simply willing to pay more?

    So no declaration of war here - simply strategic business decisions. Not as sexy a title, I guess :-)

  • Report this Comment On June 04, 2014, at 1:38 PM, twolf2919 wrote:

    @Russel, your statement " only the very latest machines are supported by Yosemite" is patently wrong - Yosemite supports the same machines as Mavericks - which, in turn, supported machines as far back as 2007. do a simple Google search if you need further convincing.

    Besides, the author was talking about "Spotlight" in general - not just the Mac OSX version. Spotlight exists on all iOS devices as well.

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Evan Niu

Evan is a Senior Technology Specialist at The Motley Fool. He was previously a Senior Trading Specialist at a major discount broker. Evan graduated from the University of Texas at Austin, and is a CFA charterholder.

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