Bitter fight: Apple not to include YouTube app in next version of iOS

7 Aug, 2012

Apple Inc's new version of its iPhone and iPad software will not include a pre-loaded app for Google Inc's popular video website, YouTube, Apple said on Monday.

It was the latest sign of the growing rivalry between the technology companies that once were closely aligned but now are vying for supremacy in the fast-growing mobile computing market.

Earlier this year, Apple said it would dump Google's mapping software from its mobile devices.

"Apple and Google are the mobile operating systems for the future and this is where the battleground is going to lie," said Needham & Co analyst Kerry Rice.

"If it's going to be a two-horse race, you certainly don't want to give the other horse any kind of lead," he said.

Google, the world's No.1 Web search engine, is also the maker of the most popular smartphone software with its Android operating system. In May, Google closed the $12.5 billion acquisition of Motorola Mobility, setting the stage for Google to more tightly integrate its smartphone software and hardware and mount a more direct challenge to Apple's iPhone.

Apple said in a statement on Monday that its license to include the YouTube app in the iOS operating system "has ended." Apple noted that "customers can use YouTube in the Safari browser and Google is working on a new YouTube app to be on the app store."

An Apple spokeswoman declined to comment on whether the company's YouTube license included any financial terms, or on whether Apple planned to replace YouTube with another pre-installed online video app from a different company.

YouTube has been among a handful of apps that come pre-loaded onto the screens of Apple's mobile devices since the original iPhone was introduced in 2007.

But the app, which was actually built by Apple using YouTube's standards, did not appear to be as full-featured as YouTube's own website: the YouTube app does not appear to feature any advertising, and the catalog of available music videos lacks many of the titles found on the website.

Analysts said Google was unlikely to take much of a financial hit from the move, though it could complicate Google's efforts to expand online services to the growing ranks of mobile users.

"It's a risk to Google's overall mobile approach and strategy, in that their services are not going to be as easy to find as they used to be," said ThinkEquity analyst Ronald Josey. "They need to be everywhere that users are."

More worrisome, said Josey, is what the move could mean for Google's deal with Apple to be the default search engine on the iPhone.

"The writing's on the wall that when search is up for renewal, there's a significant chance that Google may not be the default," said Josey.

Analysts believe Google generates a significant portion of mobile advertising revenue from iPhone users.

Former Google CEO Eric Schmidt once sat on Apple's board of directors, but the relationship between the two companies has frayed. Apple's co-founder, the late Steve Jobs, was quoted as saying he was willing to go "thermonuclear" on the search leader, after it decided to position Android against the iPhone.

News of YouTube's disappearance from Apple's mobile software came as Apple released a new test version on Monday of the iOS 6 software, which for the first time did not include the YouTube app. The final version of iOS 6 is due for release sometime in the Fall.

YouTube is one of the most popular destinations on the Internet, with more than 800 million unique monthly visitors who stream 4 billion videos a day.

Google said in a statement that it was working with Apple to ensure that it has "the best possible YouTube experience for iOS users."

Shares of Google finished Monday's regular session up 1 per cent at $622.19. Apple shares were up 1.1 per cent at $622.55.

Samsung, Apple spar over gadgets' specs

Apple Inc trotted out a veteran designer to bolster its claims that Samsung Electronics copied the iPhone, after the smartphone's 2007 launch triggered a "crisis in design" for the South Korean electronics giant.

Monday marked the second week of a high-wattage trial between the world's most valuable tech company and rival Samsung, which has edged past Apple in market share and is intent on expanding its American footprint.

The US company accuses Samsung of copying the design and some features of its iPad and iPhone, and is seeking billions of dollars in damages and sales bans. The Korean company says Apple infringed some of its key wireless technology patents.

Apple called Peter Bressler, a college professor with electronics design experience and some 70 patents to his name, who analyzed Samsung gadgets and the iPhone and iPad.

But the hearing quickly descended into a laborious rundown on design differences between the iPhone and Samsung gadgets, as the Korean firm's lawyer -- a patient and meticulous Charles Verhoeven -- used visuals and real phones to prove his point.

The plethora of examples included different curvatures of corners, sides that protrude marginally above the screen, different positions for "lozenge" earpieces, even encircling bezels that are not uniformly thick.

"You're asking me to compare peanut butter and turkey," a slightly exasperated Bressler quipped after about an hour of grilling, and Verhoeven quickly asked which design was which lunch treat. "This is a level of detail that the ordinary observer would never be interested in looking at," Bressler replied.

"The overall impression that the ordinary observer would have of that design, is that they're substantially the same," said Bressler, who has worked with Motorola and other technology clients.

"I do not believe they should be investigating teeny little details, one at a time," said Bressler, who lectures at the University of Pennsylvania and founded design firm Bressler Group.

Bressler said he read numerous depositions of Apple employees and discovered the company employed special machine processes, for instance. He also examined a number of gadgets, and Apple's patents on file before forming his conclusion that Samsung had borrowed multiple Apple design elements.

Not just Samsung in sights

Apple and Samsung are going toe-to-toe in a high-wattage patents dispute, which mirrors a fierce battle for industry supremacy between two rivals that control more than half of worldwide smartphone sales.

The trial playing out in downtown San Jose is one of many disputes between the two around the world that analysts see as partly aimed at retarding the spread of Google Inc's Android, now the world's most used mobile software.

It has already granted Silicon Valley an unprecedented peek behind the curtain of Apple's famously secretive design and marketing machine.

On Friday, lawyers showed Apple Vice President Eddy Cue urging then-Chief Operating Officer Tim Cook in January 2011 to build a mini-iPad because he believed there was a market for a seven-inch tablet. Late co-founder Steve Jobs was "receptive" to the idea, according to Cue's email, fanning speculation Apple plans to make a mini-iPad to take on cheaper gadgets from Google Inc and Amazon.

On Monday, observers caught a glimpse also into the Korean conglomerate.

Lawyers for Apple showed an internal Samsung document that likened the look of their rival gadgets to "Heaven and Earth," and described a "crisis in design."

But Samsung strategy chief Justin Denison called that kind of language "hyperbole," saying it sounded like something senior executives would have used to motivate and energize employees.

"What we would like to be able to do is just compete in the market," Denison said. Asked by Apple attorney Bill Lee whether there was a difference between competing "fairly and squarely" and taking someone else's intellectual property, he said: "Yes."