Eric Schmidt Resigns From Apple Board Of Directors: Let The Games Begin!

This was to be expected: Google CEO Eric Schmidt has resigned from Apple’s board today, citing a conflict of interest. Apple CEO Steve Jobs said that “Unfortunately, as Google enters more of Apple’s core businesses, with Android and now Chrome OS, Eric’s effectiveness as an Apple board member will be significantly diminished, since he will have to recuse himself from even larger portions of our meetings due to potential conflicts of interest.”

For quite some time, Apple and Google have been serving the same markets:

• Web-based email, calendaring, and contact lists: Apple’s MobileMe and Google’s Gmail/Calendar/Contacts
• Cellular phones: Apple’s iPhone and Google’s Android
• Browsers: Apple Safari, Google Chrome
• Productivity applications: Apple’s iWork online and Google’s Docs
• Most recently, Google has announced that it will enter the desktop OS space with Chrome OS, which would compete head-on with the Mac OS

When initial whispers regarding the effectiveness of Mr. Schmidt on Apple’s board began to spread, many analysts pointed out that even though the two companies compete in many spaces, they have different business models for the aforementioned products: Apple charges a premium price while Google either gives its products and services away for free or doesn’t charge an OEM a fee for a license (in the case of Android and Chrome OS). As I’ve stated on our daily bit podcast before, this argument holds no merit: different business models or not, most consumers will end up purchasing only one of the above products/services – either an iPhone or a Google Android-based device. That is, unless the consumer has unlimited amounts of resources (read: money) – in which case the simple rules of economics no longer apply. The same goes for the rest of the markets in which the two companies have overlapping products/services. Now that any conflicts of interest are out of the way, I see the two companies becoming more competitive, especially in the following areas:

• Mobility: enhanced multitouch support on Google Android-based devices should more closely compete with the iPhone
• Productivity: Apple’s iWork online suite being made available as a standalone product to directly compete with Google Docs
• Operating Systems: Google’s Chrome OS not withholding any punches versus Mac OS X

Yet one has to wonder what words were exchanged between Jobs and Schmidt when Apple booted all Google Voice-related apps from its App Store last week. Would that alone have been a reason for Schmidt to step down as Apple board member? Most likely, not. But it must have played a role in his overall decision. Full press release after the break, if you’re interested:  Read more »

Posted in Apple, Business, Decisions, Eric Schmidt, Ethics, Featured, Google, Industry News, People, Steve Jobs