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July 8, 2009 10:22 AM PDT

Mr. Schmidt, step down from that board

by Tom Krazit
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Dear Eric Schmidt:

Google's Eric Schmidt should think long and hard about his role on Apple's board now that Google plans to develop a computer operating system.

(Credit: Dan Farber/CNET)

It's time for you to go.

Not from Google; even your biggest detractor would give you credit for the technological marvel and prosperous business you have helped create in Mountain View. But your position on Apple's board of directors now looks completely untenable given Google's intention to release a lightweight operating system for personal computers called Chrome OS.

Google is developing Chrome OS because "We hear a lot from our users and their message is clear -- computers need to get better," according to one of your employees. The first part of Apple's mission statement declares "Apple ignited the personal computer revolution in the 1970s with the Apple II and reinvented the personal computer in the 1980s with the Macintosh. Today, Apple continues to lead the industry in innovation with its award-winning computers, OS X operating system and iLife and professional applications."

It was pretty clear before, but now it's completely obvious: you are overseeing two companies on a collision course. How can you possibly claim that you're guiding the best interests of each company when the best interest of each company in two years will be to out-maneuver the other?

CNET News Poll

Reflections on Chrome
What was your first reaction to Google Chrome OS?

Microsoft is toast.
Google is the new Microsoft.
I'll be all Google all the time.
Meh. I'm happy with Mac OS.
Linux under the hood. Hurrah!



View results

And the thing is, we've had this conversation before.

When Google announced plans to develop Android, a smartphone operating system that competes with Apple's iPhone OS for consumer and developer attention, you said you would recuse yourself from any discussions about the iPhone during meetings of Apple's board. You reiterated that stance in May after reports emerged that the Federal Trade Commission had raised an eyebrow at your presence on both boards, and when asked if you recuse yourself from any other topics at Apple meetings, you answered, "Not that I recall."

So, do you now plan to recuse yourself from any board meetings in which Mac OS X development is discussed? You're also not a member of the three main committees on Apple's board: Audit and Finance, Compensation, and Nominating and Corporate Governance. Is the iPod the only product at Apple that you're now qualified to oversee?

Representatives for both Google and Apple did not respond to requests for comment on your role overseeing both companies, and how that might have changed with the announcement of Chrome OS. But enough is enough.

As I'm sure you're well aware, the last thing you need this year is more government scrutiny of your business practices. If Apple's board doesn't ask you do to so, please submit your resignation so both companies can free themselves of this obvious conflict of interest, and continue to develop the amazing products and services you have been separately creating.

Tom Krazit

CNET News

Tom Krazit writes about the ever-expanding world of Internet search, including Google, Yahoo, online advertising, and portals, as well as the evolution of mobile computing. He has written about traditional PC companies, chip manufacturers, and mobile computers, spending the last three years covering Apple. E-mail Tom.
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by MyRightEye July 8, 2009 10:49 AM PDT
If Google take share from M$, both they and Apple win and M$ loses. This is win-win as far as I can see. There's no way Google is ever going to take share from Apple in the next decade. I think Apple should even help Google.
Reply to this comment
by calculatorwatch July 8, 2009 1:16 PM PDT
how are google and apple not competing? apple sells a traditional operating system just like windows, they have their own browser just like internet explorer and chrome, and I don't think anyone would deny that the iphone is the dominant player in the cell phone market while windows mobile doesn't matter much anymore, the only part of google apple doesn't compete with that microsoft does is search

i'm just tired of watching google go after microsoft only when competition should be among everyone. I mean how come google, one of the most prosperous tech companies in existence right now, couldn't put multitouch on their phones when palm, a company that could be entirely wiped out by a successful lawsuit against them, has been the only one with the balls to challenge apple's bogus, competition stifling patent? because the iphone has multitouch and windows mobile doesn't, that's why. Some people were even saying the G1 doesn't have a 3.5mm headphone jack because apple asked google not to include one

besides, google and apple don't need eachother's help to take down microsoft, microsoft has been failing just fine by itself lately
by Random_Walk July 8, 2009 3:19 PM PDT
"apple sells a traditional operating system just like windows"

Actually, there's where you failed.

Apple sells whole computers - hardware, software, the whole kit+kaboodle.

Microsoft sells (mostly) software - they don't sell whole computers, so their model will (as always) rely on OEMs to sell computers pre-loaded with Windows... which will be the exact same market that Google will be jumping into. Apple doesn't have to care, since they themselves _are_ the OEM for OSX.

Quick mental exercise: If All OEMs (Dell, HP, Apple, etc) abandoned their main OSes and all sold nothing but Google's OS, how do you think Apple would fare, assuming OEM market shares remained the same?

If this Google ChromeOS thingy takes off (not holding my breath), then Microsoft will see the damage long before Apple does, especially if OEMs begin shifting over.

QED: Microsoft is the only real player that stands to get hurt from all of this - assuming Google's plans actually bear fruit.
by dhavleak July 8, 2009 4:03 PM PDT
Holy $.#.!.7. -- I actually agree with Random Walk about something!
by Vegaman_Dan July 9, 2009 11:50 AM PDT
@Random_Walk:

Keep in mind that Apple has been and will always be a niche player by their own choice. When you have a limited market for alternative operating systems in the consumer marketplace, when you introduce yet another, you only dillute the shares even more so.

Google won't be going after enterprise where Windows makes their money. It's the consumer market they want and Apple is the largest alternative commercial offering. Google's entry stands to cause a market *LOSS* for Apple.

It may not happen, but your reasoning assumes Microsoft only targets consumers for their bread and butter money.
by calculatorwatch July 9, 2009 10:23 PM PDT
@Random_Walk

your arguement sounds logical and all but it's pretty dumb

Everything you said is hypothetical so the variables are exactly as you want them to make a point. Just think about it practically, consumers will have a choice between say an hp computer with either chrome os or windows and a mac. You're saying it's impossible that someone would prefer the mac with OSX over the hp with windows but would rather have the hp with chrome os than the mac? no of course thats possible and it's called competition and it's between google, microsoft AND apple

so you have failed, haha jk
by MaggieRed July 8, 2009 11:05 AM PDT
But is it wise to sleep and take orders from the enemy?

I think complaints should start filling the government agencies mailboxes in charge of regulating these two operations. Let the liberal government go after the two most extreme liberal companies.

Both Apple and Google invoked and continue to invoke politics into their products. Just try to find a non-liberal audio book or movie on the iTunes site. You won't, Apple will not allow a conservative author or movie maker on their site.
Reply to this comment
by Steve.Stapleton July 8, 2009 11:59 AM PDT
I tried the first four conservative writers I could think of (Ann Coulter, Newt Gingrich, William F. Buckley, and J.D. Hayworth) and all four had most, if not all, of the published books in audio format available on iTunes. All of Ayn Rand is there, too. I couldn't think of what a conservative movie (The Ten Commandments? Left Behind? The books are all there), but all of the movies in the catalogs Apple has licenses to are available from what I can see.

Thus, I did what you said, " try to find a non-liberal audio book or movie on the iTunes site." Unlike your conclusion, I find all the authors I could think of. Therefore, your statement is wrong and I suspect you never even tried.
by benjwah July 8, 2009 6:58 PM PDT
I didn't even bother checking iTunes and I know that's a lie. Plenty of conservatives there. Come down from the ledge, the sky hasn't fallen despite 6 months of a communist, terrorist-palling, anti-american in the white house.

Sarcasm was involved in that last sentence.
by rustybrains July 8, 2009 11:10 AM PDT
Those who can, do
Those who cant, blog.
Reply to this comment
by Super2online July 8, 2009 11:15 AM PDT
Thank you, it's about time someone started elevating this issue to a level that requires him to start providing answers to many questions.
Reply to this comment
by hminaya July 8, 2009 11:20 AM PDT
I hear there is an opening on Microsoft's board, go for it too...
Reply to this comment
by rizarsurf July 8, 2009 11:22 AM PDT
Suddenly nobody can see Microsoft's abusive and sneaky ways. We need a counterbalance to Microsoft and any company that can achieve that, has all my support. Their choke hold monopoly must end. MS is stifling any and all standards that are no good for them, regardless if they benefit consumers.

Google might not be the most open company in the world but it is one of the most open, and for that I applaud them.
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by WickNE26 July 8, 2009 11:26 AM PDT
While I agree with Mr. Krazit's premise, I have a problem with the whole "Dear Mr. Schmidt" approach to the article. Don't you think Google is keenly aware of the situation and will take the appropriate action(s)? I hardly think that this situation will remain unchanged unless Mr. Schmidt takes the initiative and carries out the author's well-intended suggestion.
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by pentest July 8, 2009 11:44 AM PDT
You do realize that the "chrome os" will run inside an OS making it an application not an operating system.

It won't do anything that Linux doesn't do right now, except spy on you.
Reply to this comment
by Random_Walk July 8, 2009 3:26 PM PDT
http://www.cnn.com/TECH/computing/9909/03/windows.nsa.02/

...we've heard this song before...
by Vrmithrax July 9, 2009 8:54 AM PDT
From everything I've seen about it, the Chrome OS will be an open-source OS (most likely based on a Linux architecture)... It will be tightly integrated, not just an application.

Oh, and it's not like this is new stuff... The original Windows products ran over the underlying DOS architecture. You know, back before Windows became bloated. So it was OK for MS to do it, but if Google does it they get derisive comments. You just gotta love single-minded viewpoints, sometimes.
by jessiethe3rd July 8, 2009 12:06 PM PDT
Google's new slogan, "Search... so we can sell your life."
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by Vegaman_Dan July 8, 2009 12:59 PM PDT
The article title should be edited to include either Google or Apple's name in it, I believe. I'm not sure how many people may recognize Mr. Schmidt's name otherwise, or the conflict of interest that comes up from being on both boards with competing OS's.

Yes, Apple would stand to lose market share as a result. Ubuntu really could lose out. MS's power is in the enterprise market and that isn't going to change with an untested entry into the OS market.
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by Random_Walk July 8, 2009 7:55 PM PDT
"Yes, Apple would stand to lose market share as a result"

If that were true, then Apple would have been dead back in 2002, when "Linux" was on everyone's lips. ;)
by Vegaman_Dan July 9, 2009 11:53 AM PDT
Think consumers. Linux is not a consumer OS you see in stores.

Once you take that into consideration, the game changes dramatically for Apple and not in a good way.

Think of schools. Will schools continue to pay high dollars for Apple systems when they can get systems given to them free by Google? Again, loss of income and market share.

Apple isn't as immune as you may believe.
by jessiethe3rd July 8, 2009 1:39 PM PDT
Your poll seems to forget about the other 90% of users who do not use Mac or Linux. Nice Poll.
Reply to this comment
by rjw_mpwr July 8, 2009 6:45 PM PDT
come on, guys. you really think google's chrome os will take off? what exactly is an operating system? http://en.wikipedia.org/wiki/Operating_system. PC's are so diverse. How can google handle all these different device drivers? Apple is different, because apple has total control over its hardware. But compete with Microsoft on OS, and compete with Linux? come on. It is not that easy to invent an OS. that chrome is just a browser, it is an application. to switch from application to OS, is a totally different story.

jw
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by Hamranhansenhansen July 9, 2009 2:55 PM PDT
Apple and Google collaborate much more than they compete. When Apple feels that this is not so, I'm sure they will ask the Google CEO to leave their board.

Steve Jobs is on Disney's board and Disney put out a line of PC's once but that doesn't matter either.

> how are google and apple not competing? apple sells a traditional operating
> system just like windows

No, they don't. When you buy Mac OS, it always comes inside a Mac. The retail box is an upgrade for existing Mac hardware only. If you have a Panther or Tiger Mac you can buy a Leopard retail box and refresh your Mac. That is all that software is designed, engineered, and licensed for.

Windows is always a software-only product. The user purchases a license and then they have to install the software on a generic PC to run it. When you buy a generic PC, it often has a 99% complete Windows install in it, which the user has to complete, including serializing and activation of some or all of the features, but they are still installing a 3rd party software product on a generic PC. If they don't complete the install, they can send the Windows license to Microsoft to get a refund and they can then install Ubuntu Linux or Google Chrome OS on that same PC, because those are competing 3rd party (not you, not your PC maker) software products that are designed, engineered, and licensed for the same purpose as Windows. What the user can't do is install Mac OS or iPhone OS or PlayStation OS on their generic PC because these are not generic PC operating systems, they're components of completely unrelated computer systems. Mac OS is covered by your Mac warranty; Windows and other software-only products has no warranty. That's why Dell doesn't want to help you with your Windows.

The key thing to notice is that many devices are now computers, and all computers have operating systems. So the fact that something is an "operating system" does not mean it competes with something else that is also an "operating system." It's the same as Ford and Boeing both make things with "engines" but do not necessarily compete in any marketplace. Two companies can make devices that both run on electricity and yet they do not compete.

All around the world right now, PC phone makers are choosing either Windows or Linux or Android/Chrome OS for their personal computers, they're not choosing between Windows and Mac OS, or Chrome OS and Mac OS. Some may wish they had that choice, but they do not.

> [Apple] have their own browser just like internet explorer and chrome

Apple's browser has built-in Google Search right in the toolbar that cannot be turned off, and that drives traffic from Macs and iPhones to Google.

Google's browser uses Apple's WebKit rendering engine. It's the Mac browser in Google chrome.

Google and Apple collaborate in the Web browser space at least as much as they compete. Both are driving HTML 5 forward because they both benefit from a vendor-neutral Web. Their interests are aligned in a way that Microsoft's are not.

> and I don't think anyone would deny that the iphone is the dominant player
> in the cell phone market

Google does not make cell phones. They make software middleware that cell phone makers license. Apple does not license iPhone OS to cell phone makers.

> while windows mobile doesn't matter much anymore

Microsoft does not make cell phones. They make software middleware that cell phone makers license. Apple does not license iPhone OS to cell phone makers.

All around the world right now, cell phone makers are choosing either Android or Windows Mobile or other for their handsets, but they're not choosing between Android or iPhone OS. Some may wish they had that choice, but they do not.

> the only part of google apple doesn't compete with that microsoft does is search

You're wrong here also. Google has Gmail; Apple has MobileMe Mail ... you can switch from one to the other. Google has GoogleDocs, Apple has iWork ... again you can switch from one to the other. Both have suites of "cloud-based" apps you can subscribe to. Both have websites you can read. None of these things matter to whether the Google CEO is on Apple's board.
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by davesmall1 July 9, 2009 5:15 PM PDT
What a doofus this author is.

Apple and Google are not enemies nor will they ever be. The common enemy is Microsoft and they need to continue cooperating against the evil empire in Redmond.
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