Barclay’s Anmuth: Google Should Worry About Its iPhone Perch

In the short term, Google’s likely to remain as the default search option on Apple’s devices, Barclays analyst Doug Anmuth says in a research note, but that doesn’t mean the search giant can afford to take that for granted. With all eyes are focused on Apple’s iPad debut on Saturday, there has been some speculation that Apple (NSDQ: AAPL) might choose Microsoft’s Bing as a search option for the new device. By itself, Anmuth doesn’t place too much importance on that decision. Given that 48 million iPhones have been sold to date, iPhone searches are likely to be more incremental than iPad searches. Plus, iPhone searches should be more location-based than iPad searches. However, the selection of a default search provider for the iPad will demonstrate which way Apple is leaning for its other products over the next few years and that could have implications for both Google (NSDQ: GOOG) and Bing, especially as Apple and Google grow more competitive on devices and, soon, for mobile advertising dollars.

On the device front, the iPhone has little to worry about from Google’s Nexus One, Anmuth says, as sales have been slow out of the gates due to the online-only distribution model, customer support issues, and lack of carriers with subsidies. But sales are ramping up and the Google device should see a boost from additional distribution on both Verizon and Vodafone (NYSE: VOD). Furthermore, sales of Android phones are also gaining, Anmuth says.

In the case of mobile advertising, Google and Apple surely competed for the acquisition of mobile ad net AdMob — which Google bought in November, followed by Apple
eventually acquiring Quattro Wireless in January. “Both seek to use their extensive data to deliver the most relevant and targeted ads through mobile devices,” Anmuth writes. “For Google, winning in apps advertising is particularly important given that apps have the potential to reduce the amount of time directly spent on mobile internet URLs and on URL-based searching.

Despite the increased competition between those two, Microsoft (NSDQ: MSFT) isn’t all of sudden positioned to be a great partner of Apple’s either. And with Apple focused on the user experience, it still has more reasons to favor Google over Bing. But that doesn’t mean Apple won’t be able to find subtle ways of exploiting Google’s first real threat to its search dominance as the battles over mobile devices and advertising dollars heats up.