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Google Breaks Apple Grip on iPhone Apps

Google (GOOG) has announced a browser-based version of Google Voice. This isn't really unexpected and had been rumored since last August after some combination of Apple (AAPL) and AT&T (T) refused to let a native iPhone version of the program onto the app store. But the interesting issue, as I've said before, isn't Google versus Apple so much as software versus platform -- or, more accurately, whether the Internet will trump individual proprietary platforms. I think this is a clear sign that it will.

You can understand the list of reasons why an Apple, or another other platform vendor, prefers having applications that run natively on their machines:

  • There's faster performance, making customers happy and not having them blame you for things being slow over the web.
  • The platform vendors gets more control and, as a result, a slice of the revenue pie. Nothing like seconds.
  • Tie apps to specific platforms and you have greater success tying customers to your product line, because who wants to port everything they have from one system to another?
However, this approach makes things more difficult for the application vendors and can leave many customers waiting for someone to finally port to their system. But by doing an HTML 5.0 version of its app, Google has opened doors to the iPhone as well as webOS from Palm (PALM).

This is exactly what some vendors feared. Not only has Google pointed out to everyone that it's possible to walk cleanly around the app hurdles and the pay structure as dictated by a platform owner, but users can also have their calls appear to come from their Google Voice numbers. Suddenly, who needs to care about number portability? The company has not only managed an end run around the handset vendors, but also around the carriers. Add free messaging, and yet another source of revenue also flies off.

What can Apple or another other vendor do? Try to disable access to the Google Voice web site, which would likely mean disabling access to Google period? How does that fly with consumers? Apple and AT&T would have been smart to give in to Google earlier. Now they've started creating their own massive competition. If Google is going to have an app store of its own, why not add HTML 5 apps and have what becomes a third party outlet for reaching customers of more closed systems?

And talk about a masterstroke of PR. Yup, it was Apple's week for big announcements, only now Google has snubbed it much the way Apple tried upstaging Google with the in-my-opinion bogus 3 billion apps download announcement during the Consumer Electronics Show earlier this month. That was posturing, but this is a significant crack in the foundation of business as usual. Notice the name: Google Mobile. It makes the company's intentions clear.

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