Apple's Threat to Google

SAN FRANCISCO ( TheStreet) -- Apple's ( AAPL) unveiling of the iPhone 5s and iPhone 5c on Tuesday showed the Cupertino, Calif.-based technology giant can still innovate and throw a few surprises at us. Even though Apple generates the majority of its revenue from the iPhone now, a software announcement that went under the radar could be Apple's biggest threat to Google's ( GOOG) dominance in search.

As part of iOS 7, Apple's Siri can now search Twitter, Wikipedia and your photos when looking for answers to questions. Craig Federighi, Apple's senior vice president of software engineering, made the announcement during the iPhone unveiling.

Google no longer has a deal with Twitter, having once indexed tweets into its real-time search engine. That deal ended a couple of years ago, as the relationship between the two companies has frayed. Google no longer offers real-time search, with the google.com/realtime link redirecting to Google's homepage.

Apple and Twitter, in contrast, have a solid working relationship, with Twitter having been integrated into iOS 5 in 2011.

Since that time, Apple and Twitter have continued to work on expanding their relationship, but the announcement of Siri, Apple's voice assistant, searching Twitter indicates Apple is more serious about its software and services than ever before. It has been speculated that Apple would use Siri to really attack Google's core search business. Having Siri search tweets, Wikipedia pages and photos furthers that speculation and brings it to the forefront more than ever before.

This isn't just about Apple strengthening its relationship with the micro-blogging social network and relying less on Google. It's about making Siri the future of search, with voice integration the key.

Both Apple and Twitter couldn't be reached for comment for this story.

Search is a very lucrative business, with Google generating $13.11 billion excluding TAC (traffic acquisition costs) in advertising and other revenue during its fiscal second quarter. This is by far Google's largest revenue product, and allows the company to fund other projects such as Google Glass, Android, etc., as many of these ventures are just an extension to get consumers to keep searching Google's engine. By not having Twitter integrated into its search (or owning Twitter outright), Google's core revenue driver is maturing. It now lacks something which Apple has the rights to.

Apple has removed Google's products from its iOS operating system in the past (Maps, YouTube) as standard features, increasingly relying on its own features. Apple was forced to issue an apology for its own Maps application, as it was not up to Apple's incredibly high product standards, and ultimately led to the ouster of former iOS chief Scott Forstall from the company.

It's unclear what the financial relationship between Apple and Twitter is, as Apple does not break down results outside of hardware and software revenue and Twitter is not public yet. Speculation surrounding the San Francisco-based social network suggests the company could go public perhaps later this year or early next year, with a market capitalization of perhaps as much as $15 billion.

While new iPhone features such as the impressive the fingerprint technology, known as TouchID, and the new A7 64-bit chip will receive the majority of fanfare and attention from the press, Siri's upgrade should not be overlooked.

Otherwise, Google and its shareholders may be "searching" for an answer that's proved elusive so far.

-- Written by Chris Ciaccia in San Francisco

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