Apple’s maps fiasco and the mobile arms race

A sense of vindication has most likely spread throughout the headquarters of Google in Mountain View, California, after reports surfaced that Apple’s new Maps app contained glaring imperfections, such as removing the Statue of Liberty from its perch in New York harbour.

Apple’s decision to boot Google Maps from the list of pre-installed apps on the newest version of its mobile operating system, iOS6, replacing it with the company’s own error-prone version, no doubt only added to Google’s joy. Apple also kicked out another popular Google app, YouTube, in the same software update.

Here is the context for those who have not been following the Maps flap: Apple rolled out the new Maps-containing iOS6 on September 19 for installation on its devices. The operating system comes pre-installed in the latest smartphone, the iPhone 5, and is an update on older devices. By most reports, the iPhone 5 is the best-selling iPhone yet: more than five million in the three days after the device’s September 21 launch, or about one million more than the iPhone 4S in the comparable period a year ago. All of those customers will get Apple Maps as the default app. However, the app’s errors are almost comically glaring: Las Vegas is depicted as a melting city, train stations are placed underwater and some bridges show up crooked. A Tumblr page is dedicated to the program’s mishaps, and Wired.com calls it a “mapocalypse”.

Mapping programs are among the most popular apps accessed on mobile devices and a key point of competition in the mobile arms race.

According to Opus Research, mobile ads that appear on maps and location apps account for a quarter of about $2.5 billion spent on ads on wireless devices this year. That’s up from 10% in 2010, the research firm said. Among iPhone owners, Google Maps was the second most popular app used in March, after Apple’s iTunes store, online measurement firm comScore reported. With Android smartphone users, Google Maps was the third most popular, after the Android marketplace and Google Search apps.

Apple has good reason to resist ceding such a popular feature to Google, particularly since Android has overtaken iOS as the leading mobile platform.

Today, Android is the top mobile operating system, claiming 51% of the smartphone market, according to an October 2 survey by comScore. Apple is second with 31.9%. Technology news site AllThingsD reported that Apple jettisoned Google Maps in part because the two companies could not come to an agreement over providing voice-guided turn-by-turn driving directions for iOS – a feature that is available to Google Maps users on the Android platform. Sources familiar with the negotiations say Apple leadership was unhappy that Google was trying to call the shots on such a key application, while Google was leery of providing voice-navigation without getting more control and greater visibility on the app – something Apple was unwilling to provide.

The acrimony between Apple and Google is well known. In the biography of late Apple founder and CEO Steve Jobs by Walter Isaacson, Jobs accused Google of stealing the idea behind Apple’s operating system and coming up with Android. “I will spend my last dying breath if I need to, and I will spend every penny of Apple’s $40 billion in the bank, to right this wrong. I’m going to destroy Android because it’s a stolen product. I’m willing to go to thermonuclear war on this,” Jobs said in 2010. At the time, Apple had just sued phone maker and Android user HTC for alleged infringement of its patents on multi-touch features. The lawsuit was one of many that the California-based firm has lobbed at companies with phones that run on Android, and it is widely believed that Google is the true target of such moves. In August, Apple won a patent infringement lawsuit against Samsung, whose Android smartphones are outselling iPhones worldwide, and was awarded damages of $1 billion.

For Apple, “it’s a good strategy to develop their own mapping service”, says Wharton operations and information management professor Shawndra Hill. “It’s a key component on everyone’s smartphone.” Although Apple Maps appears to be a deficit right now, it’s likely to become an asset as time goes on and the company is able to work out the glitches, notes Wharton marketing professor Peter Fader, who is also co-director of the Wharton Customer Analytics Initiative.