Breakingviews: Apple and Facebook become frenemies versus Google
(The author is a Reuters Breakingviews columnist. The opinions expressed are his own.)
By Robert Cyran
NEW YORK (Reuters Breakingviews) - Apple (AAPL.O) and Facebook (FB.O) have become frenemies versus Google (GOOG.O). The iPhone maker hasn't figured out social networks. Remember Ping? Facebook fears losing control to the makers of operating systems powering mobile gadgets. Making the social network work smoothly on Apple devices can boost revenue for both - and allow them to thwart their mutual nemesis Google.
Apple and Google's once close relationship has deteriorated. The two companies used to share board members; now Apple is resorting to replacing Google Maps with its own product. It's no secret what is to blame. Google's Android operating system for mobile devices has grown in popularity and Google acquired Apple's American handset rival Motorola. That threatens Apple's iPhone, its biggest and most profitable business. Meanwhile, the search giant's efforts to build and spread its social network, Google+, placed a bullseye directly on Facebook's back.
Apple's announcement at its developers' conference Monday that its newest operating systems will be integrated with Facebook is a means of fighting back. Among other functions, Facebook events and contacts can be automatically added to devices' calendars and contact lists. Apple users will be able to share pictures, maps and other files easily on the social network. And developers will now be able to make apps tailored to Apple devices as well as Facebook.
There are benefits to both. Facebook will have more pictures and posts to sell advertising against. It also gets additional information about users - for example, location - which should result in targeted, higher price ads. Allowing users to "like" apps, videos and music in Apple's online store helps the gadget maker. This alerts people to bands or programs their friends enjoy, which can spread them quickly. Apple gets a cut of resulting sales, and the more apps put on iPhones, the more compelling the gadgets.
It has become a Silicon Valley article of faith that companies need to master mobile, social and cloud technologies to prosper. Google is making efforts in both smartphones and social networks. For example, gripping social networks encourage customers to upgrade to more powerful phones. By teaming up, Facebook gets access to arguably the best smartphone platform, and Apple the world's biggest social network. Partnerships are hard to manage - after all, Google and Apple used to be best buddies - but it gives both companies powerful tools to take on a fierce common enemy.
- On June 11, Apple announced at its Worldwide Developers Conference that its newest operating systems, iOS 6 and Mountain Lion, will be integrated with Facebook. Apple users will be able to share pictures, maps and other files easily on the social network. The company's voice-activated search program, Siri, will also be able to open Facebook apps. Facebook events and contacts will automatically be added to Apple device calendars and contact lists. Users will be able to "like" apps and content that Apple sells in its online store. Finally, developers will be allowed to make apps that work on Apple devices and Facebook.
- For previous columns by the author, Reuters customers can click on <CYRAN/>
(Editing by Rob Cox and Martin Langfield)
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