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.
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.
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