Apple vs Google Rivalry to Heat Up in 2010

It's been well known that the longstanding corporate friendship that once existed between Apple (AAPL) and Google (GOOG) began to fray in 2009 after GOOG CEO Eric Schmidt resigned from AAPL's board in August citing conflicts of interest.  As we enter a new decade, however, fray is looking more and more like a huge understatement.

For starters, the growing press regarding the company's self made Nexus One phone has generated a ton of buzz that the company is gunning for a war with AAPL over dominance in the cellphone market.  While this may be true, one review suggested that the Nexus One is "not really very different than the [Motorola] Droid in any substantial way."   If the Droid's lackluster reception is an accurate indication, Apple may not have a tough time beating Google in the smartphone market.

But there's more to the growing AAPL/GOOG competition than smartphones.  GOOG has also been gunning for AAPL on other fronts.  While browser wars no longer get the front page headlines that they did back during the Netscape/Microsoft days, reports now show that Google's Chrome has moved ahead of AAPL's Safari after only 15 months in existence.  Granted, MSFT and Firefox still command the bulk of market share in the browser space, but in recent years AAPL has been gaining share in most of the spaces it enters.  In addition to browsers, there are now rumors that GOOG is working on a competitor to AAPL's yet to be unveiled tablet PC.

So what does the market think about GOOG setting its sights on AAPL?  While AAPL outperformed GOOG in 2009, investors have increasingly been gravitating towards GOOG since the relationship began to 'fray' on August 3rd.  Since Schmidt resigned from the AAPL board, GOOG has actually outperformed AAPL by a margin of 37.1% to 26.9%.

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