Siri isn't just a Google killer, it's a potential gold mine

Last year, after Apple announced Siri, I wrote about it's long term, potentially game-changing business implications for Apple. Specifically, how Siri wasn't a voice control system, but a powerful, Pixar-coated way For Apple to both intermediate and starve their biggest rival, Google, and gain the most valuable data in modern business -- customer insight.

To recap, Google was once Apple's partner on the iPhone, providing the data for Maps, YouTube, and Search. Then Google decided to become Apple's competition. Yet their previous partnership enabled Google to collect data from and, ultimately make money off of, iOS users. Perhaps more -- far more -- than they make off Android users.

Apple wants that to stop. Badly. They removed Google Maps data from iOS 6 and replaced it with TomTom licensed maps, Poly9 and C3 Technologies visualizations, and Apple rendered map tiles.

Replacing YouTube is non-trivial -- it enjoys majority marketshare. On the Apple TV, Apple added Vimeo videos but adding competing services to the iPhone and iPad would just clutter the Home screen with more non-deletable icons. Apple could remove YouTube and have Google submit their own version to the App Store (like they might now have to do with Google Maps), but then there'd lose in-app YouTube video playing, which is a compelling feature for many users. Making their own competing video service, the way Apple made their own maps service in iOS 6, would require more than even Apple's billions could afford them -- a massive user base in and content generation. So Apple is likely stuck with YouTube for as long as they can keep their agreement with Google in place.

That leaves search.

It's even less realistic for Apple to try and build a search engine than it is a video service. They could replace Google either as default provider or entirely with something like Microsoft's Bing, but that's swapping one rival for another.

Unlike video, however, search doesn't need to be replaced. It only needs to be intercepted.

Right now when you search Google, Google gets that data. It knows what you're searching for, they may know where you're searching from, and they may even know who you are. Multiply that by hundreds of millions of iOS users, and that lets Google aggregate, analyze, and sell ads against a lot of data.

If, however, you search with Siri, then all Google (or any provider) sees is Apple's servers making queries on your behalf. Not you, not your location, and not your identity.

Sure, Siri right now still has tremendous problems to overcome, but Apple has tremendous resources to bring to bear on solving them.

And because the interface is the app, Apple can replace Google's pipes whenever and wherever they want without users even noticing or caring, as long as the quality of the answer is sufficiently good.

Instead of one ginormous provider, Apple can align many best of breed providers for everything from food and entertainment to sports and local business. Which appears to be exactly what they're doing.

That starves Google of data, which ultimately reduces Google's ability to make money. No more funding Android off the backs of iOS users.

And again, that's just step one. Hurting a rival is a small things. Increasing your own business is a potential huge thing.

I'll quote the salient part of my article from last year:

With Apple as intermediary, they don't just get the customer insight for one service, they get them for every service that goes through their system. That includes both complementary and competing services. If visibility into your own users is valuable, how valuable is visibility into your competitors' users, and their demographics and behavior?To make it more tangible, Coke has no idea who buys a can of their tasty beverage at the local QuickyMart. But QuickyMart does, with ever-increasing granularity. And if they choose to, and they know how to derive proper customer insight from it, they can use it to better stock their shelves and increase their profits. And they can sell it to advertisers who want to reach their customers. And they can sell it to Coke, who wants to better understand the end consumer to improve their own profitability. And they can sell it to Doritos who wants to be bought alongside Coke, and they can sell it to Pepsi who wants those customers to buy their tasty beverage instead.

With iOS 6, Apple just added sports, movies, restaurants and more to Siri. More is likely to come.

That kind of customer insight is invaluable. It's a ticket to print money. Apple may never choose to cash that ticket in -- it's a very different business -- but either way they're shutting competitors out of doing it.

They're shutting Google out of doing it. And it looks like they're only getting started.

Rene Ritchie

Rene Ritchie is one of the most respected Apple analysts in the business, reaching a combined audience of over 40 million readers a month. His YouTube channel, Vector, has over 90 thousand subscribers and 14 million views and his podcasts, including Debug, have been downloaded over 20 million times. He also regularly co-hosts MacBreak Weekly for the TWiT network and co-hosted CES Live! and Talk Mobile. Based in Montreal, Rene is a former director of product marketing, web developer, and graphic designer. He's authored several books and appeared on numerous television and radio segments to discuss Apple and the technology industry. When not working, he likes to cook, grapple, and spend time with his friends and family.

  • I'm sure Google will be fine without apple. Of course they would like to have that but they are doing fine where they are at.
  • Google makes a large chunk, if not most, of their money off iOS devices.
  • Sounds like Google might need to implement a commercial use policy that requires payment for heavy usage of their search API...
  • Actually, Google pays Apple a billion dollars a year or thereabouts to have the privilege of being the default search engine. I don't think they are in a position to do the opposite and charge anyone for use of their search API.
  • Billions?? I very, very much doubt that. It´s not like Apple has dozens of competent serach engines to use.
  • Only 2% of Google's revenue comes from iOS devices.
    Still a lot of money, but I think they can survive just fine without it.
  • [Citation Needed]
    I'll bet they make less than 3% of their revenue on iOS, and much much less than that on maps integration.
  • Am I the only one concerned with privacy? Why is Apple using my location, search, etc and selling it?
  • "To recap, Google was once Apple's partner on the iPhone, providing the data for Maps, YouTube, and Search. Then Google decided to become Apple's competition."
    Still this wrong claim? Gogoel bought Android and was developing Android way before anybody know about the iPhone.
  • Both you and Rene are correct. Google was working on Android before the iPhone came out, but they were aiming to create a Blackberry/Windows Phone competitor. If you read Steve Jobs biography, is really obvious that he felt betrayed by Google and specially Eric Schmidt, because they switch to an iPhone competitor when they had an earlier access to it. Maybe Siri came up as a bypass to Google under Jobs or is an under Cook idea instead of the "sue everybody" kind of way of hurting Android/Google
  • actually I am pretty sure your wrong. Google originally showed android to steve jobs originally it was a Blackberry like competitor then google sees iPhone and almost copies it completely.. I would do a little more research before you make your claim
  • Google bought Android when it was a BlackBerry/Windows Mobile/Nokia Communicator clone. When Google saw the iPhone, they -- smartly compared to companies like RIM -- changed direction. The original Android wasn't much of an iPhone competitor. The one that was released clearly was.
  • Exactly. I'm so tired of this deception from history revisionists.
    This says it all:
  • That's obviously a superficial page making assumptions with no in-depth analysis or knowledge.
    Sure, on the original iPhone people did not like the non-removable battery and storage, and many people didn't like the lack of a keyboard. But the main knock against the iPhone when it came out was the lack of functionality. No document editing, no cut and paste, no email integration, only available on a single carrier with terrible coverage, etc, etc, etc. It was a toy focused for the consumer market and did not offer enough functionality to even be an option for most existing smartphone owners who were in the business tool market.
    And don't forget Apple wasn't the first with that form factor. They weren't the first with a grid of apps as an OS either. They were simply the most successful version.
    Yes, Google did end up going the toy rather than the business route because they saw the potential for success there. But Apple went the opposite direction over the years to be more like Palm and Blackberry in OS capability. The goal is to get your device to appeal to the most users. Simple business. The arguments of who copies what are ridiculous fanboy fodder.
  • I would ensure Siri works properly before I would hang my hat on it Apple. Siri is basically unusable to me (and I'm sure I'm not the only one).
  • I'm Scottish & Siri is unusable, not even counting the fact half the features doing work outside the US :@
  • Until siri or other voice assistance works 100% of the time for everyone then all they ever will be is used to show off and will be used as a side bit... Oh yeah you forget to add that Google already has its own "voice assistance". And you don't think Google is already improving on that... You talk as if this will kill Google... This isn't going to hurt them as you like to think.
  • Yeah google does and it sucks. Please look up some side by side vids and you'll see what I mean 80% of the time it doesn't even hear what you're saying.
  • Uh, there are lots of videos that show that simple commands on Googles Voice Commands beat Siri in handling like minded task.
  • MacBoy
    Get real. Just cause youre a huge fan doesnt mean your Apple & Siri is better than Google Voice.
    Siri is beta and it's got a long way to go.
    Even the Apple Maps app will need few years to reach where Google is at now. The satellite images are not as high res as googles and no street view. Plus the new 3D in google map is at least as good as Apples , if not better.
  • I would not speak so fast. I think you forget the use case and marketing. Google does not have the marketing capability apple has. Apple maps only needs to do turn by turn navigation well and it is a gold mine. Most Iphone users will not care about google maps when it is replaced by ios 6. Once the app information is intercepted Google loses its main currency; information about what we search. It is a good move for Apple to compete and long overdue. While Android is very cool and different in alot of ways from IOS, they need the information they get from IOS users to make their search queries more accurate.
  • I'll still use google maps cause street view is an important part of modern map and gps technology , IMO.
  • And you know this how?
  • Google voice has the worst speech to text ever. Pretty 1995. I know. I use it every day. And in short I need to listen to the audio every time.
  • 1995? Get real. A 1995 voice to speech would take 4 days to "train" to understand ONE person and even then it wouldn't work properly.
    And you claim to use it EVERY DAY , despite it's " flaws" ?!
  • I actually have experienced the opposite. I have been impressed with how well google's voice to text works!
  • If you're having issues with the Google voice commands that likely means a bad mic. I've actually seen that issue here between two different phones, one with a good mic and one with a damaged mic.
  • I don't think it necessarily needs to be 100%, but it does need to be much better. I don't know anybody who relies on Siri OR an Android equivelant. They are all terrible in my opinion. Gimmicks with limited usefulness.
    There is potential there. Android does a MUCH better job of doing basic tasks on the phone. Launch an app? That's old news. Android can also adjust volume and toggle bluetooth and wifi by voice commands. So functionality wise I feel it is superior, but you do need to be more specific in your commands. Siri is better at using natural language and interaction. As far as understanding, it really depends on the phone. Where iPhones are consistent, Android mic quality varies and this has a big impact on how well your commands are understood. I believe they use the same Nuance recognition technology if I'm not mistaken.
  • One rather significant point that you miss is that search cannot be intercepted without the permission of the underlying provider, not at the scale Apple needs. It is one thing to without subscription information to the New York Times or a publishers upon whom you have no dependencies, but quite another to do so to a service provider who does the heavy lifting for your services.
    A Google, a Bing, a Yahoo is not going to let Apple act as a middleman for millions of queries a day without payment, either in the form of user information or in straight up cash -- and if the information is an invaluable "ticket to print money" as you describe, any capable provider will demand it, not just cash, so, at best, Apple will have created a situation where they also have access to user data, not where they shut the provider out.
    And, of course, the disintermediation only works if the provider switch is good enough. I am going to give Maps a chance, but (disclaimer:anecdote) almost 2 dozen of my NYC-based colleagues have said they are dropping the iPhone for Android either immediately or at contract expiration if they do not announce walking and public transit support in maps by the purported fall release.
  • There are both walking and transport directions in iOS 6 maps
  • That's good news - my NYC cohorts will be glad to hear it, thanks.
  • Apologies, I spoke to soon. Walking is in there but Transit doesn't seem finished and does seem like it'll dump you out to an App Store app.
  • That's the only thing in his statement you reply to? He has a very good point which was well illustrated when Apple tried to launch Ping and tried to piggyback it off of Facebook for free. If Apple is "intercepting" the demographic information for the searches and relaying them to Google then either they are paying Google for that or Google is a lot nicer than Facebook, but that's unlikely to last if what you claim is true and it's cutting into Google's bottom line.
  • I was walking down a street outside WWDC on AT&T, so I responded as best as I could in the time that I had.
    I don't disagree that Google could become a services broker, much like they're doing with maps on the web. The point I was trying to make wasn't that they could use Google for free, but that with Siri as the unified interface they could make individual deals with multiple best of breed service providers -- Google included -- and the results would come in together.
    Basically, Synergy for search.
  • Apple has always had as their end goal to be the consumer nexus for essentially anonymous back end services, but Apple is more constrained here than you think.
    Best-of-breed providers will not be satisfied with just cash; they will want access to that "gold mine." iOS6 Maps specifically will warn the best of breed providers away from a cash only deal, as Apple has shown here they are quite capable of kicking even the 800-lb gorilla to the curb when it suits their purposes. So best-of-breed providers will demand that information, both because it is more lucrative in the present, and because it leaves them with something against the eventuality that Apple will drop them.
    This puts Apple in a position to share the information with partners, build everything themselves, or reconcile themselves to work with second-tier providers who are not in a position to cut a better deal.
  • You're making it sound like people search the web with Siri. Nobody does that. People just type the query straight into Google, so I don't really see how Google lose out on anything at all??
  • I agree. I can open up my browser and type the question in a lot faster then Siri can most of the time. I can also say that I really don have a need for Siri since most info on my phone, that Siri can access, is available fairly quickly by touching an icon or two.
  • Exactly. I think people are in love with Siri and grossly overestimate its use. Siri does use Google for search, but in situations when people are not really doing Google searches. For most searches, people will still want to see a list of results and choose among the most revelant. I estimate no more than 5% decrease in Google´s revenue and information gathering because of Siri, if that much.
  • Rene, this isn't your greatest article by a long shot.
    The reasoning is convoluted. Am I supposed to reasonably think that millions of people are going to suddenly start using Siri in public to look up information that's private?
    People by nature don't want other people knowing what their doing, at least in public when surrounded by strangers. Take note of the commercials that Apple uses. Most ads show Siri being used when your alone or when your not surrounded by strangers.
    Sure, taking away revenue from Google any way possible is good for them. But to think that this is going to be it is simply crazy.
  • Hats of to you , kind Sir. You're the voice (words) of reason ! :)
  • Siri isn't voice control. Who's to say Apple can't or won't roll a non-verbal query engine into Siri? Perhaps Spotlight on iOS could engage the same assistant service.
  • That is a valid point to bring the article into perspective. I believe that Siri can be expanded to be used as a complete Spotlight for iOS. There is a huge amount of potential here that leads me to believe that Apple has a platform to compete with the likes of Facebook and Google. A major revenue source for the company can be information. This is how Google and Facebook are so successful. If Apple is driving al queries through Siri, they have access to all the information from the user. This leaves Google and Facebook with only pieces of information that is not the complete query of the user. I agree with your point Rene. Well put!
  • You´re right and wrong. Siri is only valid as voice control. Any other form makes Siri cumbersome and much less efficient than say opening Safari or Calendar and typing something.
  • I'm just going to laugh at this article, hahahahahahah. Way over the top.
  • Really?? Man, this Site should be renamed to iExaggerate.
  • LMAO. That's pretty good, Sir.
  • Or iTakemyselftooseriously
  • The potential GOLD is see in SIRI is with the visually impaired. The ability to use natural speech is huge. Of course the reliability could still be improved, but i'm sure with time, and more data collected, this is sort itself out. I do think that eventually SIRI will be a system wide implementation. Allowing access to every part of the OS.
  • Re: "... the most valuable data in modern business -- customer insight."
    This is the holy grail of tech companies. Knowing your customer better is the key to selling things to them more effectively. It's what Amazon, Google, Facebook, and Apple are all fighting tooth and nail to get.
    Apple makes most of their money from hardware revenue now. Plus carrier kickbacks. But 10 or 20 years from now, consumer grade hardware will probably be far less profitable. Apple knows that, and they're preparing for that future now.
    Siri queries will help Apple understand users better. Much, much better. And iAd on iOS mobile devices (and, inevitably, whatever TV solution Apple has planned for us) is Apple's key to profitability in a post-hardware-margin future.
  • I think Rene is pretty much on the mark. But I wonder just how vengeful Google could get? Many iOS users like to access YouTube from their devices (via the YouTube app, via mobile Safari, or whatever else), but I feel confident the lion's share of YouTube visitors are from non-iOS mobile devices. And, perhaps, more iOS users use YouTube than Google-hobbled maps (due to their lack of features). I've never used Maps on my iPhone because it just a picture, and I cant view it while driving. and even with iOS 6 beta loaded, my iPhone 4 still wont give me turn by turn... I've gained nothing, or lost nothing... and Apple maps are not working properly yet on my 3rd gen iPad with iOS 6 beta (tells me cannot connect to internet, even though the ipad is connected via wifi at home or via my iPhone's wifi hotspot... anyway...).
    Google could simply be proactive and kill the YouTube app...
    Yes, they would lose some iOS user data, but I think they would still be quite fine, given that 95% of their revenue is from search, no from data-mining YouTube, and that a lot of iOS users access YouTube from other sources besides their devices.
    Apple would hurt far more (no YouTube access on iOS would be a huge turnoff to buyers) than Google, just as Google would hurt from less Maps usage.
    Just a thought...
  • Google killer? Yes it gets customer insight but only if customers actually use it, but no one really does. I use it once or twice a week to find something on yelp but that's it. I search on Google and use Maps multiple times a day.
  • Exactly. Remember when iPhone fans made fun of the tools who used the term "iPhone killer"? iMore has turned into what they once scorned. Kinda amusing, I think.
  • Rene thinks every time Apple announces some "new" feature it will be the end of Android and Google once and for all. I really liked my iPhone but the mentality of some iPhone users like Rene really turned me off of it. Rene doesn't really report Apple news so much as he twists every article into an anti Android/Google article. I've never seen him write one article that didn't include some kind of slight to Android.
  • All I will say to you Rene is watch Google I/O you will find more gold mines.
  • Right... Like google is just gonna sit back and let Apple use them as a "dumb pipe" and not get paid. Come on!
  • For me S-Voice works much better than siri.Infact S-Voice is becoming Siri Killer.This video just proves that.
  • Apple's Notification system is lame and incomplete when compared to Android .
  • They need to do something with Siri's voice. A more feminine voice with different accents would be far more interesting and entertaining than the current voice. And yea, Google might lose in the short term but honestly, who'd you rather have your personal info? Google or Apple?
  • neither...
  • Siri's capabilities are dire outside of the US and limited.
    Yes my IPhone calls me Boss (because the children set it up that way) but that's it. At the moment it's a gimmick no more no less. Siri doesn't add value and most people don't use it over a longer period of time.
  • +1
    When commenting on global companies and products, people need to be less US-centric.
  • funding Android off the backs of iOS users... Funny. My wife has an iPhone and I don't remember her ever mentioning that she has to pay Google for services. As far as Google collecting information as part of its service, well you know what they say, "If you aren't paying for the product, then you are the product." If Apple were to aggregate all Google traffic under a single ID and strip out the ads I can't see why Google would supply service.
  • Google can tell apple's proxy server go * itself and apple's inception of query on behalf of users would be absolutely useless.