Google's 10 toughest rivals

Apple, Microsoft and IBM among tech firms poised to ramp up competition with Google in 2010

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2. Apple

In 2009, Apple and Google went from being partners -- with common board members -- to rivals in the mobile phone and online music businesses. With $36 billion in sales and legendary engineering prowess, Apple is more than up to the task of battling Google in these areas as well as browsers, where Google Chrome competes against Apple Safari.

Smartphones

Headlines about a looming Google vs. Apple war center around the smartphone market.

In July, Apple rejected Google Voice, which allows users to share a single number across multiple phones, as an application for the iPhone. In August, Google CEO Eric Schmidt resigned from Apple's board, citing conflict of interest. By October, Google and Apple eliminated all overlapping board members amidst a federal antitrust investigation. Meanwhile, Google's Android mobile device platform -- with more than 1 million units sold as of April through T-Mobile -- is gaining ground against the popular Apple iPhone.

The iPhone continued to be one of Apple's bestsellers in 2009, with more than 20 million units sold in the last four quarters. IPhones are not only hot in the United States, but in Asia, where more than 100,000 units were sold in China this fall.

Online music

The digital music market is poised for strong growth in 2010, with Google and Apple both in hot pursuit.

In October, Google launched a music search service that lets a user preview a song when making a music-related query. Google's music search partners include MySpace and La La Media, a streaming music Web site that was purchased by Apple in December. Another music partner of Google's is Pandora, a streaming music service that's available on Android-based mobile phones.

All of these online music upstarts like Pandora and La La Media are out to unseat Apple's iTunes, which became the No. 1 music retailer in the United States in 2009. Although sales of its popular iPod device are slowing, Apple still reported sales of more than 54 million iPods in the last four quarters.

3. AT&T

AT&T is a rival of Google's politically -- they are on opposite ends of the network neutrality debate -- and in the smartphone market, where AT&T is the exclusive carrier of the iPhone in the United States until June 2010. With more than $123 billion in sales in the last four quarters, AT&T dwarfs Google and isn't afraid to flex its regulatory muscle as in its complaints about Google Voice to the Federal Communications Commission.

Smartphones

In its battles with Google, AT&T is out to protect its iPhone-related revenue, which averages out to $1,000 per iPhone customer per year, experts say.

In the last four quarters, AT&T has activated 11.5 million iPhones, producing a significant stream of wireless data revenue for the carrier. That's why AT&T is pushing Apple to extend its exclusive contract for another year. In the meantime, AT&T is hedging its bets and could partner with Google in 2010. Rumor has it that AT&T will offer its first Android phone from Dell  in 2010.

During 2009, AT&T and Google lobbyists argued strenuously before the FCC about Google Voice. AT&T wants Google Voice to be required to connect expensive calls through rural telephone companies like AT&T is required to do under "fair access" rules. Google argues that it isn't a carrier, can't offer a free application if it is required to meet carrier regulations, and shouldn't be required to connect expensive porn and conference calling services through rural carriers. For now, Google Voice is still in beta mode and isn't available on the iPhone.

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