Author: Per Lindberg, ABG Sundal Collier

Exposing Apple’s premature, troubled “splash” into mobile maps

Apple Inc. may have sold 10 million iPhone 5s in the past three days, but the central question still begs to be answered: does the latest iteration of the iconic device live up to expectations or does it evoke a sense of real disappointment? hysical attractions, the power of fashion and the urge of boosting self-esteem aside, early adopters and “friendly users” have been quick to lambast management for ditching Google Inc (NASDAQ:GOOG) Maps in favor of what emerges as a vastly inferior ‘in-house copy” (see e.g. BBC.com/news/technology for real-time demos). Nokia enters the picture as well.

Nokia google versus apple maps
Via CNET

Apple Maps, based on TeleAtlas’ location data, can hardly be deemed ready for “prime-time”: (i) clouded satellite images, (ii) limited street details, and (iii) outright mispositioning of cities (Luton), railstations (Paddington), football stadiums (Manchester United). The embarrassing mishap is bound to disenchant subscribers, blemish the world’s most famous brand and sway carriers to ‘devalue’ the merits of the iPhone vis-à-vis hundreds of devices powered by Android and Windows. We retain the view that Apple Inc. (NASDAQ:AAPL) has made grave mistakes by removing Google Maps and Youtube from the list of pre-installed services: such action will only serve to “bewilder” its fan-club.

It may also have misjudged the broader consequences of filing lawsuits against its most precious supplier: Samsung, adjoined by Google Inc (NASDAQ:GOOG), may soon exact revenge, in the process of which forcing Apple to use less exemplary components – Apple may fall behind in hardware – an area where Nokia Corporation (NYSE:NOK) (BIT:NOK1V) and Samsung tend to excel. The owner of NAVTEQ – Microsoft Corporation (NASDAQ:MSFT)’s mapping technology of choice in all WP 8 devices – Nokia is in pole position to re-establish itself as a formidable competitor to Apple in the smartphone race.

Apple Maps met with widespread criticism – heaping pressure on management to remedy strategic missteps Neither subscribers nor shareholders can be satisfied with Apple’s decision to abandon Google Maps. Its freshly released inhouse “copy-cat”, based on TeleAtlas’ raw data, cannot be described as anything but a flop, on a par with or quite plausibly worse than the “antennaegate” marring iPhone 4 two years ago: mapping is a vital ingredient of the smartphone experience; search and show is “reproducible”, the qualities of mapping apps are “benchmarkable” – there is nowhere to hide. Apple Inc. has made a mistake. It needs to explain on what grounds its decision was made.

It must take a step back. It may have to reintroduce Google Maps in short-order. As Nokia Corporation (NYSE:NOK) (BIT:NOK1V) hinted once the embarrassing shortcomings of Apple Maps were discovered, catching up with the world’s two champions – Google Maps and Nokia Corporation (NYSE:NOK) (BIT:NOK1V) Maps – is, at best, a multi-year journey. This is a situation which Nokia Corporation (NYSE:NOK) (BIT:NOK1V)– whose NAVTEQ technology powers Microsoft Corporation (NASDAQ:MSFT)’s WP 8 marketplace – is bound to forcefully exploit.

Operators, for one, may soon be convinced that Apple’s iPhones do not deserve a disproportionate share of device subsidies.

“Unlike our competitors, which are financing their location assets with advertising or licensing mapping content from third parties, we completely own, build and distribute mapping content, platform and apps,” the company wrote. “In other words, we truly understand that maps and location-based apps must be accurate, provide the best quality and be accessible basically anywhere. That’s been standard practice at Nokia for the past six years, and we also understand that ‘pretty’ isn’t enough.”

Source: CNET, citing blog on Nokia website.

Written By: Per Lindberg, ABG Sundal Collier