Google Photos: How big a threat to Apple?

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CEO Tim Cook makes plain that Apple won't compete, at least on one level

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Google Photos, an amped up cloud-based photo storage service, organizer and editor, was one of the big unveils at the Mountain View, Calif. company's I/O developer conference last week.

Reviewers raved about it. Bloggers bragged it up. Analysts applauded it.

"Google Photos looks amazing," wrote independent analyst Ben Thompson, on his subscription-based Stratechery.com last week. "And, I might add, it has a killer tagline: Gmail for Photos. It's so easy to be clear when you're doing exactly what you were meant to do, and what you are the best in the world at."

The mainstream media gave Google Photos enough coverage to turn faces an off-shade-envy green in Cupertino (Apple), Menlo Park (Facebook) and Redmond (Microsoft). Maybe Cupertino most of all: Apple likes to think it owns photos. Heck, one of its current ad campaigns relies on striking photographs taken with its iPhone 6 smartphone's camera.

But envy -- of the unlimited storage space Google tossed into the Photos pot, of the machine-directed, and thus automated, organization -- is one thing, fear is another. Google released the iOS version of the Photos app simultaneously with one for Android, hoping to wean iPhone owners from Apple's ecosystem, if not platform, with a superior service targeting one of the core chores conducted on mobile.

So should Apple see Google Photos as a threat? Should it react? And if so, how?

"It's a small threat to Apple," argued Ezra Gottheil of Technology Business Research. "For one thing, Apple has never done online well. And Google Photos has a very impressive set of features. It's building on the big lead Google already had [over Apple in photo management]."

"The storage is a big deal," echoed Jan Dawson, chief analyst at Jackdaw Research, about Google Photos' unlimited cloud capacity, at least for photos of 16-megapixel resolution or less andvideos up to 1080p. "Anyone with a huge library will have to pay a fair amount of money for a tiered plan."

And by "tiered," Dawson clearly meant Apple's iCloud service, which has a four-tier pricing structure once past the measly 5GB free allotment, the smallest in the business. Those price run from $0.99 per month for an additional 20GB to $19.99 per month for an extra 1TB.

(As an example, Mike Elgan, the Computerworld columnist who gave Google Photos the thumbs up last week, would, with his 215GB collection of photos and videos, have to pay the $9.99 per month iCloud fee (for 500GB) to store them with Apple, or $120 a year. That's moot with Google.)

"Apple seems to be nickel and dime you on storage," agreed Gottheil.

True. "Largess" and "iCloud" aren't usually in the same sentence, even after an Apple price cut last year.

Apple could, theoretically, boost its free photo-storage allowance to match Google, or at least narrow the gap. But that's not likely because Apple works from a different motivation than Google on this, and almost every other, level. Everything done by Apple is part of the drive to sell devices. At Google, that's not the case. Google starts with advertising and works back: What improves advertising is good.

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"Google Photos won't directly threaten the iPhone," said Gottheil. "As far as photographic technology's concerned, the iPhone has as good a camera as you can get. It'll do as the front end to Google Photos just fine."

To a certain degree, Gottheil's right. But Apple, like any platform maker, would rather keep its users engaged in its own circle of apps, not those of a rival. Two years ago, it made that clear when it launched, to some initial ridicule, its own Maps, swapping that for Google's, which got the boot.

"I think they need to counter, if only by continuing to improve the experience," said Carolina Milanesi, chief of research and head of U.S. business for Kantar WorldPanel Comtech. "The last thing Apple wants is customers using an iPhone and not linking to Apple's services. Customers like that are less engaged, and the barrier to switch [to another device platform] is lower for them."

That's particularly true of photographs, with their strong emotional resonance. Apple uses photos in its ads for good reason, to connect its iPhone to customers' emotions -- make them cherish the object because they cherish what it produces. Lose the link, give iPhone owners more justification to desert to Google's ecosystem, and the attachment to the device weakens.

That's the theory anyway.

Apple could boost the amount of free storage space for photos, but that's the least of its problems competing with Google here.

"The biggest difference is that Google Photos really feels like it's a cloud-first product. Apple Photos has to be resident on a device first," pointed out Dawson, echoing Gottheil's commentary about Apple's poor standing in the cloud, one the latter called "lame."

Because that difference plays to each company's strength -- again, Apple's rationale for what it does is to sell devices, and services are secondary at best -- it's unlikely that Apple can match Google Photos in the area even more important than storage space.

"The automatic organization [of Google Photos] is much more significant," asserted Dawson. "The big unmet in photos is finding them. Image recognition has to be really smart." He was dubious Apple would, or could, venture into that territory on a competitive level with Google, whose mission is to capture as much information as possible, and has the machine learning chops to do it.

So was Gottheil. "I think for Apple to do better in the cloud, it's going to require a separate design and development team," he said. "Something out of the blue."

Why? Because Apple's internal DNA is simply not able to execute on cloud-based initiatives.

But maybe Apple doesn't want to compete there.

Although some saw Apple CEO Tim Cook's latest take on privacy as a cynical smokescreen to disguise the fact that the Cupertino, Calif. company is far behind in online, others read it as sincere.

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In a speech Monday covered by Techcrunch, Cook took to task information collection, calling out Google, if not by name.

"We believe the customer should be in control of their own information," Cook said. "You might like these so-called free services, but we don't think they're worth having your email, your search history and now even your family photos data mined and sold off for god knows what advertising purpose [emphasis added]."

"Who wants to hand over all their photos to Google?" asked Milanesi in an interview before Cook's comments. "What are they using the pictures for? That's the question."

Others wondered that too. "Why is Google doing this, and how will it make money off it?" said Dawson, who pointed out that Google serves ads based on machine-directed examinations of Gmail messages. "What will Google learn about you [from photos]? Photos are quite private things."

"Will Google use Photos like Gmail? You betcha," said Gottheil. "They'd be crazy not to. It's a potential gold mine for them."

Apple has been trying to differentiate itself from the likes of Google and Facebook on just this level, constantly reminding customers that that is exactly what they are to the company: Customers who buy their devices, not information to be mined for advertising.

"How will Apple respond?" asked Dawson. Not by duplicating Google Photos' backend processing. "They have to make the product better."

Exactly how Apple does that, of course, is the $64K question.

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