290 Part Two Information Technology Infrastructure Google, Apple, and Facebook Battle for Your Internet Experience CASE STUDY T hree Internet titans-Google, Apple, and always played a large part in the Apple ecosystem, Facebook-are in an epic struggle to dominate and they have emerged as a major revenue source. your Internet experience, and caught in the Apple has more than 1.3 billion active devices in cir- crossfire are search, music, video, and other media culation, creating a huge installed base of users will- along with the devices you use for all of these things. ing to purchase services and a source of new revenue Mobile devices with advanced functionality and ubiq- streams. Apple's services business, which includes uitous Internet access are rapidly overtaking tradi- Apple's music (both downloads and subscriptions), tional desktop machines as the most popular form of video sales and rentals, books, apps (including in-app computing. Today, people spend more than half their purchases, subscriptions and advertising), iCloud time online using mobile devices that take advantage storage, and payments, has been growing at a double- of a growing cloud of computing capacity. It's no sur- digit rate. prise, then, that today's tech titans are aggressively As Apple rolls out more gadgets, such as the battling for control of this brave new online world, Watch and HomePod, its services revenue will Apple, which started as a personal computer com- continue to expand and diversify. According to pany, quickly expanded into software and consumer CEO Tim Cook, Apple has become one of the larg- electronics. Since upending the music industry with est service businesses in the world. This service- its iPod MP3 player, and the iTunes digital music ser- driven strategy is not without worry because both vice, Apple took mobile computing by storm with the Google and Facebook offer stiff competition in the iPod Touch, and iPad. Now Apple wants be services area. the computing platform of choice for the Internet. Google continues to be the world's leading search Apple's competitive strength is based not on its engine, accounting for about 75 percent of web hardware platform alone but on its superior user in- searches from laptop and desktop devices and over terface and mobile software applications, in which it 90 percent of the mobile search market. (Google is a leader. Apple's App Store offers more than 2 mil- is also the default search engine for the iPhone). lion apps for mobile and tablet devices. Applications About 84 percent of the revenue from Google's par- greatly enrich the experience of using a mobile ent company Alphabet comes from ads, most of device, and whoever creates the most appealing set them on Google's search engine. Google dominates of devices and applications will derive a significant online advertising. However, Google is slipping in its competitive advantage over rival companies. Apps position as the gateway to the Internet. New search are the new equivalent of the traditional browser. startups focus on actions and apps instead of the Apple thrives on its legacy of innovation. In web. Facebook has become an important gateway 2011, it unveiled Siri (Speech Interpretation and to the web as well. In 2005, Google had purchased Recognition Interface), a combination searchavi- the Android open source mobile operating system gation tool and personal assistant. Siri promises per- to compete in mobile computing. Google provides sonalized recommendations that improve as it gains Android at no cost to smartphone manufacturers, user familiarity-all from a verbal command. Google generating revenue indirectly through app purchases countered by quickly releasing its own Al tool, and advertising. Many different manufacturers have Google Now. Facebook has developed an intelligent adopted Android as a standard. In contrast, Apple al- assistant called M lows only its own devices to use its proprietary oper- Apple faces strong competition for its phones and ating system, and all the apps it sells can run only on tablets both in the United States and in developing Apple products, Android is deployed on over 80 per- markets like China from inexpensive Chinese smart- cent of smartphones worldwide; is the most common phones and from Samsung Android phones that have operating system for tablets; and runs on watches, larger screens and lower prices. iPhone sales have car dashboards, and TVs-more than 4,000 distinct started to slow, but Apple is not counting on hard- devices. Google wants to extend Android to as many ware devices alone for future growth. Services have devices as possible