Apple drops YouTube as iPhone 5 hints a Google-free phone

The Apple [AAPL] decision to dump native YouTube support from iOS 6 is utterly inevitable as the company continues to punish Google [GOOG] for what Cupertino’s executives see as that firm’s duplicity regarding Android and the iPhone.

[ABOVE: iPhone introduction in 2007. Apple's Steve Jobs says "when it comes to the Internet, it's hard not to think about Google. Here's that company's then CEO, Eric Schmidt, talking about the "enormous brain trust" of Apple's iPhone development team.

'Special' friends no more

There’s no doubt the relationship between the two companies has changed. Friends no more it seems unlikely anything more than a partial detente can ever emerge between the two. 

The latest twist in the transmission sees Apple’s most recent iOS 6 beta abandoning the dedicated YouTube app. "Our license to include the YouTube app in iOS has ended," Apple said in a statement to The Verge

"Customers can use YouTube in the Safari browser and Google is working on a new YouTube app to be on the App Store." The app will remain within iOS 5 and earlier and Google says it will introduce its own apps for Maps and YouTube. It’s also possible Google and not Apple terminated this deal.

One thing is clear. Apple CEO Steve Jobs’ determination to go “thermonuclear” in his campaign against the former ally hasn’t evaporated with his passing.

Hit the button

The abandonment of native YouTube support is just the latest in a sequence of steps, which also include numerous patent lawsuits against Android partners worldwide:

  • Apple’s voice assistant, Siri, may not be perfect but already represents an effective direct threat to Google search.
  • Safari now makes it much easier for users to choose to use a search engine other than Google when they seek stuff online. That’s despite Google paying Apple c.$1 billion a year in exchange for its default position. 
  • There’s some expectation Apple may soon switch to Bing as the default search on iOS. I’ve noticed more Bing search results in various website logs, so Microsoft’s search solution is becoming a stronger alternative.
  • Apple’s iOS 6 will offer 3D Maps, a direct (and potentially better) replacement for Google Maps (though I think this has a way to go to truly replace Google Maps).
  • Apple’s decision to get friendly with Facebook and Twitter may be an admission of defeat when it comes to creating an Apple solution for social networking, but is a bigger kick in the teeth to Google Plus.

These actions show Apple believes itself utterly vindicated in its Google grievances. The company is drawing attention to its perception that the search giant’s business loyalty -- at least when it came to its relationship with Apple -- is open to question.

Who may benefit from thinking about that?

Trust, not money, is business currency

Well, perhaps HTC should think about it. That company has seen over $1 billion wiped from its market capitalization in the last 48-hours as investors respond to disappointing smartphone sales and a 45 percent plunge in company revenue. 

That’s in stark contrast to Samsung: Rapidly emerging as the poster child for the Android generation, Samsung’s seemingly cavalier approach to the entire US legal system cannot disguise that the Android-driven mobile industry is in meltdown. 

Between them, Samsung and Apple account for 108 percent of industry profits, with others effectively subsidizing the success of the two big firms. This means Google’s Android partners are competing not just with Apple but against each other. 

This is a vicious gladiatorial contest between hardware makers who take all the product design and marketing risks, while Google creams the advertising and location data cash from the top of the mix.

Google’s Motorola Mobility purchase means even Samsung faces an unpredictable future threat from its own OS supplier. Will Google favor products from its new hardware arm, and would it have spent $12 billion on a company it isn’t going to try to turn around?

The effect of the war has been pretty abysmal for both sides. I’ve noticed a change in the way many in the public regard Apple, meanwhile Google’s behavior is attracting growing interest from anti-trust regulators and competing firms everywhere. However, as Apple moves toward a Google-free iPhone it is Google which stands to lose the most, as Cupertino scrambles to provide superior alternatives to anything Google previously offered, taking advantage of Apple's "product design brains trust" (c/o Eric Schmidt).

Apple -- the partnership company

The irony is that the war is also forcing Apple to embrace new partnerships and alliances across the industry, even while Google is seen to become ever more isolated. 

That’s a big lesson Apple has learned from Google and from Samsung. Both those firms were special partners to Apple. It threw vast sums of cash in both directions. Now it is looking to form relationships with a wider variety of partners in order to make itself less vulnerable to any future defections by its allies.

In other words, in its relationship with Google Apple has finally learned the value of small-scale strategic partnerships. In future this can only be good for a company that’s continually criticized for its “walled garden” approach and “not invented here” style. And that’s a good thing.

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