YouTube Dodged Apple's Bullet, Matrix-Style

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Apple (NAS: AAPL) raised a lot of hackles last month when the company decided to drop the native YouTube app from future iPhones, iPads, and iPods. These devices are nothing if not brilliant media consumption devices, and YouTube remains the largest video destination online. Isn't it insane to ship media tablets without the content app?

Well, some iPhone users comforted themselves with the fact that the YouTube app was getting crusty anyway. The mobile browser version includes a ton of features that the app never delivered, such as "like" and "dislike" buttons or suggested search results. So it's not like Apple fans would be deprived of their viral videos.

Today, YouTube parent Google (NAS: GOOG) took the next logical step. YouTube's engineers have cooked up a brand-new app for iPhone and iPod users, with an iPad version to follow soon enough.

Unlike the old app, which was developed by Apple and hardly updated since it was first released, the new app does everything the browser-based experience can offer -- and more. Among many other upgrades, this release supports video ads which in turn enables oodles of videos that are licensed to play only after the pre-roll video ads. If nothing else, this expands the library of available music videos something fierce.

This may very well have been Google's master plan all along, given that the old app's license expired over the summer. Users are certainly not left out in the cold (as some critics first thought).

The next big question is, will Apple include the new YouTube app by default or will users have to find it in the app store? Slapping a YouTube icon on your home screen from the get-go would put a lot more eyeballs on the app, but then again, Netflix (NAS: NFLX) isn't complaining about the lack of prime iPhone real estate for its streaming service.

Mobile traffic remains a massive growth driver for the paid subscription service, and YouTube has the additional advantage of being free. So this app should quickly become the de facto standard for watching YouTube videos on your Apple gadgets.

If Apple ever fired a bullet, YouTube dodged it with ease. But it's more likely that the pair planned this all along, with a wink and a friendly nudge.

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Fool contributor Anders Bylund owns shares of Google and Netflix, and has created a bull call spread on top of his Netflix shares. He holds no other position in any of the companies mentioned. Check out Anders' holdings and bio, or follow him on Twitter and Google+. The Motley Fool owns shares of Netflix and Apple. Motley Fool newsletter services have recommended buying shares of Apple, Netflix, and Google. Motley Fool newsletter services have also recommended creating a bear put ladder position in Netflix and a bull call spread position in Apple. The Motley Fool has a disclosure policy.We Fools may not all hold the same opinion, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

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