Google's Eric Schmidt on the relationship with Apple: the adults are talking now

WSJ: How has Google's relationship with Apple changed in the past year?

Mr. Schmidt: It's always been on and off. Obviously, we would have preferred them to use our maps. They threw YouTube off the home screen [of iPhones and iPads]. I'm not quite sure why they did that.

The press would like to write the sort of teenage model of competition, which is, 'I have a gun, you have a gun, who shoots first?'

The adult way to run a business is to run it more like a country. They have disputes, yet they've actually been able to have huge trade with each other. They're not sending bombs at each other.

I think both Tim [Cook, Apple's CEO] and Larry [Page, Google's CEO], the sort of successors to Steve [Jobs] and me if you will, have an understanding of this state model. When they and their teams meet, they have just a long list of things to talk about...

WSJ: What's the endgame of all of this patent litigation?

Mr. Schmidt: It'll continue for a while. Google is doing fine. Apple is doing fine. Let me tell you the loser here.

There's a young [Android co-founder] Andy Rubin trying to form a new version of Danger [the smartphone company Mr. Rubin co-founded before Android]. How is he or she going to be able to get the patent coverage necessary to offer version one of their product? That's the real consequence of this...

WSJ: Despite's Android's growth, app developers complain that they have to build different versions for different Android devices.

Mr. Schmidt: Because some of the phones are down the road. But if everybody's at [version] 4.0 or 4.1, it is in fact compatible.

WSJ: Developers currently earn more from building Apple apps than Android apps.

Mr. Schmidt: Google Play [Google's app store] and the monetization just started working well in the last year, maybe the last six months. The volume is indisputable, and with the volume comes the opportunity and the luxury of time.

WSJ: Do you see Apple's Siri virtual assistant as a competitor to Google search?

Mr. Schmidt: Well, it's competition. I mean, in the antitrust filings, we actually use Siri as an example of future "non-conforming to the Web" competition , which we do worry about.

WSJ: How does Google respond to hardware partners wondering whether you are now competing with them?

Mr. Schmidt: We are and we're not. When we bought Motorola, I personally flew to Samsung, who's the number-one partner of Android by volume.

I told them that the [Android] ecosystem has to be favored at all costs...the Motorola products can't be unduly favored, unless you're also unduly favoring Samsung. If it looks unfair, and then the ecosystem unravels, then it's a terrible mistake.

WSJ: What do you think of Microsoft's new operating system Windows 8 and Windows Phone 8?

Mr. Schmidt: I have not used it, but I think that Microsoft has not emerged as a trendsetter in this new model yet.

WSJ: There is regular speculation that you might be tapped for a government post. Are you interested?

Mr. Schmidt: I said last time and I've said again that Google is my home. I have no interest in working for the federal government.