Would conflict with cult of Apple

It would be a serious mistake for Apple to contemplate switching to Bing as the default search service on the iPhone, say Oppenheimer analysts. News emerged today that Apple may be in talks with Microsoft, looking to make the switch as a means of distancing itself from Google. Google has its own phone platform, Android, and still earns money from the ads displayed in iPhone search results.

The corporations are in conflict, says Oppenheimer's Yair Reiner, because Apple wants to be the "special box in a world of generic services," whereas Google intends to be the "special service in a world of generic boxes." Turning to Microsoft could however be a mistake for Apple, Reiner argues, given that Apple has persuaded the public to adopt an anti-Microsoft bias through its Mac vs. PC campaigns. "Cozying up [to Microsoft] could bring more risk than reward, not least because it would clash with the Mac vs. PC campaign and the Apple brand identity that has coalesced around it," says the analyst.

A CNBC source meanwhile claims that talks have been ongoing since October or November, and that there are several reasons the deal may be coming about. Microsoft for instance has discovered that the Bing iPhone app generates more queries than any other mobile form of the service, including even the search integrated throughout Verizon's network. The company is also believed to be willing to sacrifice more of its advertising income than Google, which pays Apple a small amount for every ad tap on an iPhone.

Apple CEO Steve Jobs is said to recognize Bing as a search API that can be deeply integrated into products without displaying Bing webpages or interfaces. In contrast to other reports, the source adds that Jobs "cannot and will not build a [proprietary] search engine," mainly because of the expertise needed. Apple just wants to insert its own ads into first-party iPhone apps, the person says.

It is further alleged that "Jobs hates Eric," referring to Eric Schmidt, Google's CEO. The two once served on the Apple board, and have participated together in press events. No explanation for the animosity has been offered.

by MacNN Staff