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Summary:

As the mobile game is shifting from hardware to services, Apple needs to have more deep services of its own, rather than relying on competition. And maps is an important control point for the company.

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Apple has enjoyed a significant app ecosystem lead, but Android has now caught up. This removes a unique iOS selling point, and it also makes it easier for iPhone users to switch to Android when they next upgrade. Apple needs new control points, and mapping is a key answer for them.

As the mobile game is shifting from hardware to services, Apple needs to have more deep services of its own, rather than relying on competition. Important mobile service platforms include mapping, commerce and payments, social, and search. Across these categories, other companies are in the lead, not Apple. Of all the things that Apple might invest their vast cash in, maps is actually an important and strategic control point.

Maps and navigation are very popular on smartphones all around the world. Location is one of the few ways people organize and understand their world, which is why maps are also integral parts of lots of different mobile services. So mapping is both a popular service in itself and an “atomized” ingredient in a range of other services.

Apple’s tough competition in mapping

The challenge for Apple is that mapping is an inherently complex game, and the competition is both far ahead and moving fast. Competition comes in the form of mapping-focused heavyweights but also nimble start-ups. At Fjord we’ve collaborated with both Nokia and Foursquare, two of the location pacesetters.

The Google Maps service is very popular, and Google is constantly enriching and evolving it. Google Earth, Google Street View, and photos from their Picasa service make the mapping experience more engaging. Their newly launched Field Trip application is starting to hint at proactive location services. With all their location investments, Google is starting to merge the digital with the real world.

Nokia acquired the global map business NAVTEQ in 2008, and has designed an end-to-end mapping offering. Beyond the maps on their own phones, Nokia’s mapping platform now powers lots of other services, including 90% of in-car navigation systems, Microsoft’s Bing Maps, and also the maps on Amazon’s Kindle Fire. Nokia allows you to scan your surroundings using Nokia City Lens, and they’re also busy mapping indoor locations like airports and shopping malls.

Foursquare – which like Apple defected from Google Maps recently – is a playful, engaging, and increasingly contextual service. When you realize that Foursquare intends to take on Google in search, it’s no surprise that they jumped ship. Foursquare is starting to put the billions of data points that their users have created to good use, as their focus is shifting from simple check-ins to smart recommendations.

Apple naturally knows that the competition is fierce and that the mapping domain is complex and fast moving. Yet it decided to create its own mapping platform, which will be an expensive move without obvious monetization options. It decided to get involved in order to reduce reliance on core competitors, to generate rich data that it can use in its own services, and to create a tighter link to other apps and services. Maps will become Apple’s smart service glue.

How Apple might use its mapping platform

Apple will naturally add new novel mapping user experiences, and its 3D flyovers is a first attempt. But the top priority for Apple will be to capture usage data to enrich its mapping platform. Google benefited from the crowdsourced location data generated on iOS. Now Apple will keep all that data goodness. The data is created both when people use the Apple Maps application, and when they use other apps or services that utilize Apple’s location APIs. The data will make Apple Maps smarter and more accurate over time.

The other priority for Apple will be to use its mapping platform to enrich its own services. A few predictions:

  • Siri will become significantly smarter, as she’ll learn a lot about locations, navigation, traffic patterns, and more.
  • Passbook, Apple’s hesitant entry into offers and commerce, will become truly smart. Apple will be able to control end-to-end solutions for location-based offers, recommendations, and payments that will compete with Groupon, Square, and Amazon.
  • Smart location metadata will be added to any photo or video that iOS users take, and the photos and videos will be able to be found and re-lived using location. User-created photos can also enrich any location entry, and Apple users might be able to “play” the media from any place.
  • The iOS calendar will take the location from your next calendar entry, it will calculate the time it takes to get there from your current location, and it will alert you when you need to leave.

When it’s more mature, Apple Maps will make a range of its services smarter, and the rich location data will also give Apple a chance of making credible and differentiated entries in key service domains like commerce, search, and social.

Apple’s dilemma

Seen from the outside, the “downgrade” from Google Maps to Apple’s own maps might seem like a dumb move. But it’s, in fact, evidence of Apple’s long-term bet on service platforms as strategic control points. In order to secure its own long-term prosperous future, Apple chose to risk alienating users with some imperfect maps in iOS 6, a decision it has publically acknowledged with an apology from CEO Tim Cook.

To preserve its iPhone and iPad profit margins and sales volumes in the future, Apple needs strong ecosystem glue, which attracts customers and keeps them in the Apple family over time. As the iOS app advantage has diminished, Apple is now betting on maps as the service glue they need to prosper over time.

Olof Schybergson is CEO and Co-Founder at the service design consultancy Fjord. Fjord has provided strategic direction and design for such brands as Citibank, Foursquare, Nokia and Qualcomm. You can follow them on Twitter at @fjord.

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  1. Hubris, plain and simple.

    1. What a dumb comment! Apple did not wait because they know they need the help of their users, as did Google when they issued their mapping software, to have any hope of catching up to the other providers.

  2. I just posted about this yesterday. I think you’re downplaying their decision when you say “alienating users with some imperfect maps”, because it’s a lot more than just imperfect maps. It’s an awful unusable app that has stranded every IPhone owner and forced them into a competitor’s app. I get the long term angle, but in the short term they’ve managed to get an incredible amount of egg on their face. Wouldn’t it have been better to wait until their technology was stable before cutting the Google cord? http://bit.ly/V08G8z

    1. Please don’t speak for us you know nothing. Get back to your android device.

      There are dumb people but they are smart by keeping their mouth shut.

      1. Thanks Troll. I’ve been an IPhone customer since first gen.

      2. Ouch! Adam, you got owned by Noel. Now you can take your foot out of your mouth. From Android devices owner.

    2. Agreed w/Noel. Apple could also have run their Maps and the Google-based app in parallel, and let those most committed to the brand start the hard work of building Apple Maps without forcing everyone else to suffer along.

      1. No they couldn’t. Google’s license runs out in the not too distant future, and they won’t let Apple have turn by turn navigation in Google maps app on iOS. They were afraid if they did, then they would have given away one of the best features of Android. So Apple decided that they would come out with their maps app and hopefully they would be able to keep working on it until they got it as accurate.

        The technology companies Apple acquired along with having Tom Tom help, didn’t quite mesh well together in the time they had do it in. Add to the fact that Google and Apple’s relationship is getting frostier, it’s just a matter of time when Google uses it’s maps app as a pawn in their war with Apple. Plus Apple has cut off Google from using it’s maps app to harvest data from iPhone users to sell to location based advertisers.

        The other interesting point is that now there are other companies including Google that are making map apps for iOS. So the moral is that if Apple doesn’t make it or makes it crappy, there are usually other options on the Appstore. Plus it’s not hurting iPhone 5 sales at all.

    3. So far I’m enjoying the new maps – not been stranded anywhere or been forced to using a competitors app. That sounds like hyperbole to me. I’m not suggesting there isn’t problems. But I’m not convinced they’re as deep as all the critics are writing. Ultimately the competion will be good for all. And with millions of iDevices collecting data, it’ll improve, just as others have.

      1. Agreed. Extrapolating to millions of users when no serious survey info exists outside Cupertino is chump’s logic.

        When Ggogle maps came out they didn’t have the name right for the road where I live – and it took 3 wks for them to sort it. iMaps had me 240′ away from our home – the Apple widget changed it within 24 hours.

        So what? It will probably take 4-6 months for numbers to come public and that will be when the critter is running well enough to aid folks actually earning a living whilst using their iOS device.

    4. A bit of hyperbole in “every iPhone owner”.

      I’m actually quite content with Maps, and haven’t experienced any of the aforementioned “issues” in my day-to-day usage.

      I know it’s convenient to speak in broad generalizations, but you undermine your own credibility when doing so.

    5. You clearly have not used the current Apple Maps application. It works better in every way than the Google powered iOS5 version except for Public Transportation Data (a deal breaker for many). It has somewhat less data than Google but it is generally better data and does not give you the wrong data as often as Google.

      1. My experience is entirely different, I’m based in London.

        Apparently I have two car firms operating from my back garden (they are actually based 6 miles away, the local pub is on the wrong road, and when last week I wanted to visit a business based in a wharf on the Thames, Maps gave its location as the middle of South London.

        Traffic information is much less detailed too.

        I agree with the others who say Apple should have launched new maps offering turn by turn, possibly as beta, possibly under a new name ‘Navigator’? and kept the legacy maps.

    6. I’ve been using this “unusable app” that has “stranded every IPhone owner” since day 1 of the iOS6 release and have not had any problems. This has been across 3 states, two of which I had never been in until last week. I’m not saying the app is perfect, but it isn’t the end of the world as you make it out to be.

    7. This comment is absolute bulls**t. I’ve been using Apple maps since iOS 6 Beta 1. It works very well. I’ve had no issues and turn-by-turn navigation is the best I’ve ever used.

      You sir, are a shameless troll spreading blatant misinformation.

    8. “It’s an awful unusable app that has stranded every IPhone owner”

      Hyperbole much? so far it has not stranded me.

  3. Mapping is an important platform strategy… umm… duh. If Apple was really as smart as everyone gives them credit for, they would have made a big acquisition when all the consolidation was happening a few years ago. Their entry strategy into mapping is the typical tragedy of moving outside your competency. Write down in the future?

  4. This is a very good and reasonable article. Writing from Los Angeles, I find the existing Apple maps and turn by turn to be fantastic. I’ve had no problems with it, and the lack of turn by turn with Google has been a dangerous omission for years. It’s easy to blame the problems all on Apple, but the fact is that Google is the company that refused to provide turn by turn to Apple users. Thus, they forced Apple to go it on their own. People are acting like Apple is the evildoer here, when it was Google that first copied IOS to create Android, then crippled their maps on IOS to give Android an advantage. Now people are piling on Apple?
    I understand that the maps are much poorer in Europe than in the U.S. Hopefully they will fix this soon, but as has been noted in this article and others, increasing sophistication requires user data, so Apple needed to dive in at some point. Certainly, this is a little too soon, but hopefully they will respond quickly. They certainly have enough money to throw at the problem.
    As for the idea of shorting the stock, I dare you.

    1. Apple created IOS before Android? what bubble are you living in? The first public release of iOS, version 1.0, along with the original iPhone, was released in June of 2007. Android’s first public release was released in November of 2007 – they were obviously being made at the same time. If anything Android was first.

      Android Inc. was founded in 2003 by Andy Rubin and a few other guys known for their work in the mobile industry. It wasn’t until 2005 that Google acquired them. Based on this, you can say that development on Android as an operating system began as early as 2003.

      get your facts straight before opening your mouth. Google being the evildoer, stop being so petty. Google made a product and Apple used it, Apple have stopped using it because Google didn’t want to give them a certain feature – it isn’t evil, it is because Apple is their competitor in the market. Apple are now far behind in Maps and have to play catchup… they should have done this years ago or acquired another company who had it done already.

  5. This is a very good and reasonable article. Writing from Los Angeles, I find the existing Apple maps and turn by turn to be fantastic. I’ve had no problems with it, and the lack of turn by turn with Google has been a dangerous omission for years. It’s easy to blame the problems all on Apple, but the fact is that Google is the company that refused to provide turn by turn to Apple users. Thus, they forced Apple to go it on their own. People are acting like Apple is the evildoer here, when it was Google that first copied IOS to create Android, then crippled their maps on IOS to give Android an advantage. Now people are piling on Apple?
    I understand that the maps are much poorer in Europe than in the U.S. Hopefully they will fix this soon, but as has been noted in this article and others, increasing sophistication requires user data, so Apple needed to dive in at some point. Certainly, this is a little too soon, but hopefully they will respond quickly. They certainly have enough money to throw at the problem.
    As for the idea of shorting the stock, I dare you.

    1. Joshua Lyle Powell montefuego Monday, October 1, 2012

      You have no idea what your talking about if you think Android in any way copied iOS. it’s the farthest thing from a copy you could get with entirely different architecture and written in a different language with entirely different platform base. At least try to pretend like you know what your talking about.

      1. ROFL!

        Android is a blatant ripoff of iOS. Your inability to acknowledge this simple fact means:

        A) you’re totally obtuse.

        B) you are so emotionally wedded to Android, you’re denying the simple reality of the situation.

      2. The main point here is the idea that Android phone copied. The similarity is quiet striking only if you ever used an IPhone from its design to software interface. I can give you illustration in abundance when you are comparing the two Phones.

      3. Let’s talk UI here rather than under the hood. Pretty close rip off.
        Kudos to Microsoft for a truly different smart phone touch UI

  6. Nice overview with a lot of depth – much more so than the simple news coverage over the last few days. Interesting predictions about the future too. The big question is whether Apple Maps can recover without a major change of direction (no pun intended).

  7. Apple, Christmas 2012 best 4th quarter in the history of the company!!!

  8. To me, this looks a lot like Jobs’ explanation of the Antenna-gate last year. Anyway, I think this is the best take on the issue so far :) http://www.theglobaledition.com/tim-cook-to-apple-maps-users-with-phone-feature-you-can-call-friends-and-ask-about-directions/

  9. The DUMB move was dropping Google Maps before they had Apple Maps ready to go. A more arrogant use of customer trust is hard to imagine. Their users could have helped them….if they were inclined and still had Google Maps to fall back on. There are posts all over the Internet from people with knowledge and experience in the mapping business…explaining that it will be years before Apple Maps approaches the level of the competition. Apple customers are supposed to endure that?

  10. No one will care about a map problems (most people don’t care now) by the time their contracts are up and the media attention has died down.

  11. Cameron Prockiw Sunday, September 30, 2012

    Maps also has the potential to produce lots of revenue, on the same scale that search does. Google was the first to monetize search on a large scale and made a multi billion dollar company doing so. The next big player will probably be the one who figures out how to monetize maps on a large scale (think offers and ads within maps). Increasing, I find that I search in maps first on my smartphone, not in Google. This is a trend that Apple is aware of.

    1. Exactly.

  12. Apple was in the exact same position with Google as they were with Microsoft in 1986: A direct competitor was responsible for the single most prominent application on Apple’s platform. With Microsoft, Apple counted on them being satisfied with earning money on Office for Mac – whereupon MS proceeded to leverage Windows-only features on Office to dismantle Apple’s tenuous lead in the market. Over the past year and half, Google has been delivering some of the most powerful features in Maps for Android, whereas Apple had only a year left before they would have to renegotiate access. Apple faced another year of fighting to keep parity while providing ad income and traffic for Google or launching their own project now. A year from now, they wouldn’t have been much farther along in development without a widespread (and widely ridiculed) public beta. Apple’s problem isn’t software, it’s data and metadata, which Google has been steadily collecting and incorporating for almost a decade. It would take a while to neutralize that lead whether they started now or started next year. Regardless of the flack, starting now is better.

  13. “The iOS calendar will take the location from your next calendar entry, it will calculate the time it takes to get there from your current location, and it will alert you when you need to leave.”

    Google Next does this already.

  14. My take on how Google went about developing Google Maps into what it is today. Did Amazon have a part to play in Google maps? Can Apple catch up on the 400 year lead that Google claims to have?

    http://www.eitest.com/the-secret-behind-google-maps/

    Regards,
    Sanjay

  15. “When you realize that Foursquare intends to take on Google in seach…”

    That is the funniest thing I’ve read in a long time. And it destroyed the credibility of anything else you had to say in your article.

    1. Hi Steve. Thanks for your comment. Of course the notion of Foursquare taking on Google is search might seem extreme. But disruption of large profitable businesses often come from small startups, and increasingly from mobile focused startups. A couple of related pieces worth checking out:
      1. About Foursquare’s ambitions in discovery & search: http://bit.ly/UiqXO7
      2. About mobile startups disrupting tech giants: http://bit.ly/NeIQvr
      Foursquare vs Google is certainly a David vs Goliath fight. I didn’t predict that Foursquare would win (at least not anytime soon), but that doesn’t prevent them from having a good go.

  16. IsExtraordinary Sunday, September 30, 2012

    Hmmmm… Apple seems to be struggling after the inspirational leadership of Steve Jobs..

    isextraordinary
    Information with Inspiration

  17. uhm i smell something fishy w this news about apple fail. wheres the quality control and test run before launched to market.

    http://techkiddy.blogspot.in/2012/09/the-map-war.html

  18. apple = junk. grow up get a droid!

  19. Well, then why not call it what it is — BETA. They could have avoided the backlash.

  20. Harish Chakravarthy Monday, October 1, 2012

    Informative article. Map also is a secret weapon ( after email as of now) to provide consumers with a wide range of custom services. Raising # of mobile devices makes maps, geo location & mobile commerce hot markets. When you add the possibility to adding additional layers to map (& other services) by taking advantage of vehicles that be driven without a driver, Maps stands out as the single app that can provide customers a one stop solution and evolve.

  21. Personally I am an android user (so bring on the flaming) that said i personally feel Apple would have been better served had they retained the legacy map application from ios5, now as i understand it ios6 maps works for the most part well in the USA but outside the USA is where the true problem lies with the application. My thought is apple retains legacy maps, in the mean while releases ios6 maps beta which most IOS users would likely have lapped up. This would have prevented any smearing of Apple’s name in the public eye and would have given them the much needed data that they want. and the smearing of Apple’s name has happened whether you want to admit it or not, simply put most IOS users have come to expect perfection out of Apple’s offerings and its fairly clear that IOS 6 maps was anything but what Apple’s fan base has come to offer.

    With regards to those claiming that Android is a rip off of IOS 6 that is simply not true. Look at all the features that IOS 6 has borrowed from Android since version 2.1 there are features that IOS users are just now getting that have been around since Eclair. That said im not saying Apple is purely copying from android there are aspects of the UI of android that have been borrowed from IOS 6 but the mimicry is mostly of WebOS (an offering of HP). If you feel like im wrong point out the features that android has stolen from IOS and i will be more than happy to engage in an adult conversation with you on the subject.

    – Cheers

  22. Why apple uses google maps in its first iphone.there is a study by the new york times regarding the use of google maps in iphone

    http://goo.gl/WDmXl

  23. Good article, I also think that Apple was looking ahead and sees that local search is a multi-billion dollar business where the map app — not the browser — is the entry point so they wanted control of that.

  24. It’s a sound argument. The mistake Apple made was to release Maps prematurely, when their contract with Google was valid for 1 more year. They should have stuck with Google Maps for one more generation while improving their in-house solution. Instead they decided to rush their Maps as a tent-pole feature of iOS 6 because iOS 6 had little or no other exciting features.

  25. Tim Cook and Apple didn’t give a rat’s backside about iPhone users or the impact on their lives and businesses when they slid their Apple ( lost in the woods) Maps shive between the ribs of millions of unsuspecting users who blindly responded in good faith to the iOS6 upgrade command displayed on their devices last week. I purchased an android device in response after three days of bad info from Cook’s bungle.

  26. Welcome to the 21st century folks. In this world, businesses place unreasonable deadlines for their products and services. Remember that contractor who said on 6 weeks to retile your bathroom? Well it’s the same deal. In every workplace I have occupied, there has been one executive who was batcrazy and pusheed his employees to the brink. Pushing out the impossible when it wasn’t near ready. Happens all the time. Just feel sorry for those suckers who need to be the first to get the new iPhone, or whatever. Just couldn’t wait huh?

  27. I wish Steve Jobs was still alive, very healthy and the CEO of Apple.

  28. Simon Schnieders Tuesday, October 9, 2012

    mapping is, “without obvious monetization options”… Really, so local search and SMB’s aren’t obvious?

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