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How Apple's 'thermonuclear war' on Google has changed since Alphabet

The search engine giant, which recently reorganized under the name Alphabet has seen its market value soar and invested in moonshot bets such as self-driving cars. Meanwhile, analysts have wondered about Apple's future, as smartphone sales slip and both companies vie to be No. 1 in schools.

In an interview with biographer Walter Isaacson before his death in 2012, Apple co-founder Steve Jobs his feelings toward Google鈥檚 Android operating system, arguing that Apple had originally developed its technology.

鈥淚鈥檓 going to destroy Android, because it鈥檚 a stolen product," he said. "I鈥檓 willing to go thermonuclear war on this."

Four years later, Mr. Jobs鈥� thermonuclear war appears to be taking a different form, as Google 鈥� which reorganized its divisions into the holding company Alphabet last year 鈥� is emerging as an increasingly viable competitor to Apple鈥檚 status as the world鈥檚 most valuable company.

By the end of trading on Thursday, Apple鈥檚 market value was $522 billion, while Alphabet was valued at $515 billion, the .

While Apple remains a critical darling, with its annual media events drawing rapturous crowds, analysts have been pointing in recent months to a declining smartphone market that contrasts with a growing market for digital advertising, which still makes up a large part of Google鈥檚 primary business.

But perhaps more significantly, the search engine giant鈥檚 reorganization appears to point to a desire to move its business beyond individual products into broader areas that affect users鈥� daily lives, while emphasizing 鈥渕oonshot鈥� bets on technologies that may or may not pay off.

The Alphabet reorganization separates Google鈥檚 products from its investments in self-driving cars, its Google Fiber Internet effort, a focus on life science technology through Verily, and X, which is working to develop delivery drones.

鈥淚n the technology industry, where revolutionary ideas drive the next big growth areas, you need to be a bit uncomfortable to stay relevant,鈥� wrote Larry Page, Google鈥檚 co-founder, who now serves as chief executive of Alphabet, in from August announcing the reorganization. 鈥淔undamentally, we believe this allows us more management scale, as we can run things independently that aren鈥檛 very related."

The approach appears to be paying off, as Apple was previously valued at $643 billion, almost twice Google鈥檚 $361 billion 13 months ago, before the reorganization, the AP reports. Alphabet is set to release its quarterly financial results on Monday, separating them into two categories 鈥� Google and 鈥淥ther Bets,鈥� which includes efforts such as Verily, which has developed a contact lens that measures glucose levels.

Apple is also rumored to be working on new products such as self-driving cars, virtual reality, and Internet TV that could push its revenues back up 鈥� it reported earlier this week, the first since the smartphone launched in 2007. But the company鈥檚 plans so far have been more vague, with senior vice president Jeff Williams saying last May that 鈥渢he car is the .鈥�

鈥淲e鈥檙e exploring a lot of different markets,鈥� he added.

One market where both companies have tried to establish their dominance is in schools, where education technology is reported to be an $8 billion industry in the US.

So far, Google appears to have the leading edge, with its low-cost cloud-based Chromebook laptops surpassing 51 percent of the education market, according to a recent report by market research firm .

Apple products, including iPads, laptops, and desktops fell from 32 percent to 24 percent during the third quarter of 2015, the firm said.

But Apple has been redoubling its efforts in education, including adding a simplified login screen and the ability to more easily share and manage secured iPads in schools to its recently-released mobile update, iOS 9.3.

On Thursday, the company said it acquired education technology startup LearnSprout, which makes software that helps schools and teachers track students鈥� performance. The company is also rumored to be working on education tools for the iPad that would allow students to see and share interactive lessons more easily.

鈥淎pple buys smaller technology companies from time to time, and we generally do not discuss our purpose or plans,鈥� spokesman Colin Johnson . Technology journalist Jessica Lessin, editor of news site The Information, tweeted that the purchase had actually happened in July:

Whether the two companies fortunes could change further is likely still an open question, especially if Apple introduces new products or Alphabet moves further in ventures such as self-driving cars later this year.

But with the reorganization, Alphabet鈥檚 Mr. Page appears to be taking a longer view, moving into a role that focuses more on discovering and nurturing new technologies at the company, the

鈥淲hat makes something interesting for him is a big technical challenge,鈥� Terry Winograd, a computer science professor who was Page鈥檚 thesis advisor at Stanford University, told the Times, adding, 鈥淚t鈥檚 not so much where it鈥檚 headed but what the ride is like."