In the face of mounting regulatory pressure, Google CEO Eric Schmidt is resigning from Apple’s board of directors as the search company rolls out products that compete with Apple’s offerings.
Schmidt has held the position since August 2006. In the succeeding years, the two tech titans have found themselves increasingly competing in hot areas like the mobile market, where Apple’s (NASDAQ: AAPL) iPhone series is being challenged by smartphones based on Google’s (NASDAQ: GOOG) nascent open-source mobile operating system, Android.
Then there’s Apple’s Safari Web browser, which now competes with Google’s nearly year-old Chrome browser. Both browsers are based on the WebKit rendering engine.
The two firms could also face off eventually in desktop operating systems, now that Google is developing Chrome OS, a free OS based on its Web browser that could be a potential rival to Mac OS X.
Schmidt has said that he did not participate in any of Apple’s board meetings that concerned mobile strategy or other sensitive business areas where the two companies might overlap.
Today, Apple CEO Steve Jobs called Schmidt’s resignation a mutual decision.
“Eric has been an excellent Board member for Apple, investing his valuable time, talent, passion and wisdom to help make Apple successful,” Apple CEO Steve Jobs said in a statement.
“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,” Jobs said. “Therefore, we have mutually decided that now is the right time for Eric to resign his position on Apple’s Board.”
Schmidt first hinted publicly that he was rethinking his role on the board in July, shortly after the Chrome OS announcement, when he told reporters at a conference in Sun Valley, Idaho, that he would discuss the issue with Apple’s management.
The two companies’ apparent collision course had already caught the eye of regulators at the Federal Trade Commission, who opened a probe into the potential conflict of interest concerning Schmidt’s position in May, before Google announced its plans for an operating system.
The Federal Communications Commission is also looking into Apple’s recent move to bar a Google mobile application from its App Store for the iPhone. The FCC on Friday send letters to Apple, Google and AT&T, the iPhone’s exclusive carrier, asking for information regarding the incident.
“In light of pending FCC proceedings regarding wireless open access and handset exclusivity, we are interested in a more complete understanding of this situation,” James Schlichting, the acting chief at the FCC’s Wireless Telecommunications Bureau, said in the letter.
In addition to rejecting the VoIP service app Google Voice from the App Store, Apple also pushed to have Google Latitude, a mapping service, delivered only via mobile Web browser — not as a full-fledged mobile app.
Schmidt’s decision to step down from Apple’s board also comes against a backdrop of Android’s mounting challenge to Apple’s booming iPhone business, which remains strong even as the recession saps sales of its desktop PCs.
Total unit sales of the iPhone increased 4.5 million, or 626 percent, between April and June, and 8.6 million, or 182 percent, between October and June, compared to a year earlier.
Meanwhile, Motorola, HTC, Samsung and Acer are all planning to introduce smartphones this year that run on Android. Motorola, especially, is placing much of its hopes for a turnaround in its mobile business on Android.
InternetNews.com Staff Writer Kenneth Corbin contributed to this story.