When Apple met Facebook

Despite the ugly divorce with Google, Apple has jumped back in bed with another tech titan. Will its new relationship with Facebook prove a more lasting affair?


Could Apple and Google ever have hoped to stay friends? And can Apple’s new alliance with Facebook prove a more lasting affair?

Those questions were thrown into sharp relief this week as Google Maps was dropped as the iPhone’s default maps service, to be replaced by Apple’s homegrown alternative. At the same time, Facebook, which has had a wary relationship with Apple, was welcomed wholeheartedly on to the iPhone and iPad with a tight integration that will make the social networking service simpler to use for its members.

According to the narrative constructed by Steve Jobs, his company’s close relationship with Google would have stayed rock-solid had the search company not turned on its ally and launched its Android software, challenging the iPhone.

Yet it is hard to see that Google had much choice. With the web moving from the open PC world to the more closed platform of mobile devices, it feared losing access to its users or being forced to pay to reach them. That Google was right has been eloquently demonstrated this week by Apple’s own actions this week. As we wrote here more than a year ago, Apple had been working for a while on its own maps service. Given the importance of location, maps act as an ideal platform for commerce and search on mobile.

A cleanly divided world in which one company (Apple) sold hardware and software and another (Google) supplied the services that ran never seemed likely to last. Internet services, after all, are merely software delivered in another form. And, as Apple showed with the iPod, a close integration of all three often brings the best experience.

Apple will now need to prove that it can match a company like Google that was born in the services world. Given the air of invincibility that surrounds it at the moment, there are few willing to doubt its success in new markets. But as demonstrated by MobileMe – a service for managing things like email and calendars, and one of the few Apple services that Mr Jobs was prepared to call a failure – Apple has not always thrived in services before.

Meanwhile, as the Silicon Valley landscape shifts, is Facebook’s accommodation with Apple likely to be any longer lasting?

Certainly, this looks like a more obvious case of mutual dependence. Apple failed miserably with Ping, its attempt to build a social network around music, and must feel it has little choice but to draw closer to Facebook, 500 million of whose members now access the service over mobile devices.

Apple may also feel a closer affinity with Facebook than it did with Google. As Mr Jobs once remarked disparagingly, smartphone users don’t want search: they want apps. The more successful Google’s mobile search service became, the bigger the challenge it would have posed to Apple, drawing users to the web rather than to Apple’s own App Store in search of information or entertainment.

But will Facebook be willing to leave itself exposed any more than Google was? So far, at least, it has shown that it is willing to play by Apple’s rules.

That means helping to reinforce the apps ecosystem that underpins the iPhone and iPad. One aspect of the new alliance will involve Facebook showing its users what apps people in their social networks are downloading on their iPhones and iPads, bringing a valuable new form of social discovery to the App Store.

This is an extension of the accommodation struck late last year when Facebook launched an iPad app that prompts its members to go to the App Store when they try to play games or launch other applications while using the Facebook service on their Apple device.

All of this suggests that Apple’s new Facebook friendship should have a longer lease of life than the doomed Google relationship. But things can change quickly. The tie could weaken if mobile users discover hot new social apps that reduce the time they spend on Facebook – a fear that prompted Facebook’s $1 billion agreement to buy Instagram earlier this year. Facebook’s own ambitions may take it into new services that conflict more directly with Apple, particularly as Apple moves deeper into services itself.

Facebook has already come up with a Plan B. Alongside its iPad app, it has produced a browser-based ‘Web app’ that would let mobile users bypass the App Store and launch other web apps from inside the social network – potentially turning Facebook into a rival mobile platform.

The Apple/Facebook accord looks about as permanent as any such alliance in Silicon Valley. Who knows what tomorrow will bring.

Copyright The Financial Times Limited 2011.

InvestSMART FORUM: Come and meet the team

We're loading up the van and going on tour from April to June, with events on the NSW central & north coast, the QLD mid-north coast and in Perth, Adelaide, Melbourne, Sydney and Canberra. Come and meet the team and take home simple strategies that you can use to build an investment portfolio to weather any storm. Book your spot here.

Want access to our latest research and new buy ideas?

Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.

Sign up for free

Related Articles