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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The BC Museum is working with indoor-positioning-firm Wifarer to not only map its floor plans but also provide a location-aware guide to its exhibits. Like Google and Microsoft, Wifarer uses Wi-Fi fingerprinting technology to create its maps and triangulate a phone’s location indoors. But the Vancouver-based startup is only using maps and indoor navigation as a starting point.

Once a base map is produced, a building owner can start adding “objects” to the map, corresponding to objects in physical space. Those objects can then be populated with information, which can be accessed directly from the map or pushed to a user when the object is nearby. Like Foursquare, Wifarer is trying to embed virtual information into physical locations. The difference is Wifarer’s definition of a location isn’t limited to a business. It knows where you are in the room.

Wifarer has developed its own proprietary fingerprinting technology that determines a phone’s exact location within 3 meters in nearly all cases, but in areas of high Wi-Fi density like airports, hotels and conference centers it can hone that accuracy down to half a meter, Wifarer founder and CEO Philip Stanger told GigaOM.

In the case of the BC Museum that technology is being used to embed virtual data into physical exhibits. As you move throughout the museum, information on particular exhibits automatically overlays the map as you approach them. Objects are also available as icons on the map, so you can investigate whether it’s worth making that trek to the next wing to see the raptor exhibit or if you would rather just stop at snack bar (which might just push you a coupon for lunch as you near it).

“We’re not just building maps,” Stanger said. “We’re triggering location events. That’s what we’re most excited about.”

A lot of malls, but also a lot of mapping companies

Wifarer faces a lot of competition. The indoors is the last great frontier of location-based services, and companies big and small are racing to survey it. Wifarer, however, has a different business model than Google, Microsoft or other mapping startups like Micello, Stanger said. Instead of building maps and then selling services like advertising back to the companies located within them, Wifarer is working at the behest of the building it is surveying. It has a Software-as-a-Service business model, which allows its partners to build their own revenue models and control how their maps are utilized, Stanger said.

Like Google Maps or Bing Maps, Wifarer uses a single application to aggregate all of its maps (Stanger said creating individual apps for individual venues would be pointless), which consumers can download from the iTunes and Google Play stores. But the individual maps belong to and are controlled by the venues that license Wifarer’s software. That allows a museum to use the technology to build a virtual and customizable multimedia guide, while a mall might use the technology solely for commercial promotional purposes, Stanger said.

Of course, there’s nothing to prevent a Google, Bing or Micello from trying to map your Wifarer customers’ venues as well and offer their own competing location-based services. But Wifarer is providing means for its customers to protect their turf. Stanger said it has developed software that will disrupt the Wi-Fi fingerprints that other mapping companies use to determine location, making accurate coordinate readings impossible. Very sneaky.

The BC Museum is Wifarer’s first publicly announced customer, but the startup said it’s in beta trials with several other venues, including the Bay Centre shopping mall in Victoria and the Vancouver International Airport. This year it will expand into the U.S., covering all points of the compass: It is working with an East Coast shopping center, a West Coast university, a Midwestern hospital and a Southern convention center.

Founded in Feb. 2010, Wifarer is preparing to seek a Series A round. It has 20 employees spread between its headquarters in Vancouver and offices in San Jose, Calif. Its original funding came from $500,000 in Canadian government grant money and investments from its founders, though the company is starting to see a revenue stream from its venue deals.

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As of yesterday, StreetSide doesn’t exist in Germany, although Microsoft’s saying it may only be a temporary measure. And when I say it doesn’t exist, I mean no-one in the world gets to see the StreetSide photos for Germany, and no-one in Germany gets to see the equivalent imagery for anywhere in the world.

A little history on this: when Google launched Street View in Germany in 2010, it had to give citizens there a chance to opt out by having the facades of their buildings blurred. After all, the Germans do privacy in a big way. However, Google got hundreds of thousands of these requests, all of which it had to process manually — while it can rely on automation to blur out people’s faces, that doesn’t work for buildings.

Almost certainly due to the cost of doing this (though Google has never confirmed the reason), last April the company simply gave up on taking new Street View pictures in Germany. But then Microsoft stepped into the breach with StreetSide.

It followed a similar consultation procedure to Google’s, inviting people to have their homes blurred out, and it launched the service late last year. It’s not as comprehensive as Street View, as Germany’s a big country (by European standards) and there’s a lot of driving still to be done… but at least it’s up-to-date and playing by the rules, right?

Wrong.

We have learned that there are a limited number of customers in Germany who have raised concerns about their blurring requests,” Microsoft Germany spokesman Thomas Baumgärtner said in a statement. “As we take privacy and data protection of our customers very seriously, we decided to take down the StreetSide Beta service in Germany, while evaluating these individual cases and working on a solution.”

So this time it’s not even a matter of data protection authorities getting involved; it’s a “limited” number of individuals.

Privacy vs utility

Like other forms of search, street imagery is one of those web services that’s so useful it’s become near-indispensable. If you’re flat-hunting or looking for holiday accommodation, it tells you how upscale or rough the neighbourhood is in advance. If you know where a shop is located but you can’t remember what it’s called, you can simply zoom in and remind yourself, then look it up online. I certainly know I do this when I want to place a take-out order at a nearby restaurant.

But in Germany, all the Google Street View imagery is out of date (as I was reminded recently when I realised my local Indian restaurant had changed ownership and name in the last year). StreetSide was promising an alternative, but now that may be scuppered too.

Don’t get me wrong. I’m a strong advocate of privacy and I think it should be defended online — after all, what you give up there you can’t get back later. But this is ridiculous.

If you can walk down a street and view a building’s frontage, I see no reason why you shouldn’t be able to do the same in a virtualized environment. Street View and StreetSide don’t give you a key to the front door; they just tell you what’s where.

And that, surely, is the point of maps.

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With 9.9 percent market share six months in, Microsoft is emphasizing Bing features that make use of researching what people actually want to know and piping in information from content creators to provide answers in a dense but readable way. So, for example, concert data comes from Zvents, health info from the Mayo Institute, and college admissions statistics from the National Center for Education Statistics.

Microsoft was careful to say at today’s event that it is strategically “ingesting” data, not curating it by hand. In some ways, the Bing system seems brittle and undemocratic — trusting a single source rather than the wealth of knowledge on the web. However, for weather, for instance, Bing uses three different providers and stacks their forecasts right next to each other, giving best placement to the one that’s been the most accurate to date.

Such information is now structured into what Microsoft calls “entity cards” (what shows up when you search) and “task pages” (what you see when you click through), which it will continually roll out for additional topics and will also be used to make mobile search activity more efficient and informative. “A lot of what we’ve done in the PC space is actually a lot more applicable and relevant on the mobile phone,” said Nadella.

Where the Bing model doesn’t really work is for information Microsoft is porting in from more robust and social environments like Facebook and Twitter. Demos of planned products that harness data from the two sites seemed pretty silly; for instance, you can see your connections on Facebook ranked by number of posts, or look for upcoming birthdays. On Twitter, you can see the most-followed users and top political or entertainment figures.

Easily the coolest thing Microsoft presented was a demo of the new Silverlight-powered Bing Maps beta, which uses 3-D modeling and photo-realism to move between birds-eye, road, aerial, streetside and Photosynth user-submitted pictures. The demo, presented by Blaise Aguera y Arcas, a Microsoft partner architect, was awesome, showing fluid and spatially coherent shifts between different views and elegant “mash-in” data from location-tagged posts from Twitter (well, mostly Foursquare) and user review sites. Unfortunately, when I tried to use the beta for myself, it couldn’t pull up coverage of our San Francisco office (one of the 100 cities supposed to be included), and it slowed down Firefox to an excruciating crawl. For now I’ll be sticking to Google Maps, but you can see how the kind of structured data Bing is honing would make sense in that layered visual environment.

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