Nokia Corporation (NYSE:NOK) has been a double beneficiary, amid the rising tensions between the iPhone maker, Apple Inc. (NASDAQ:AAPL), and the Google Inc (NASDAQ:GOOG) camp. As per a report from ABG Sundal Collier, the rising tensions, which benefit Nokia, are the direct result of “Nokia Maps bolstered by Apple’s candid admission and surprising promotion of competitors’ solutions”. The Finnish handset maker was able to bolster its position last month, owing to Apple’s victory over Samsung in a California court, paving the way for a potential sales ban on the popular Galaxy family of smartphones.
Apple Inc. (NASDAQ:AAPL), the world’s most valuable firm, acknowledged its greatest blunders of substituting a “vastly deficient Apple Maps for the highly popular Google Maps”, which not only hampered its reputation, but also gave a chance to its users to look for alternatives, “but also directs its ‘frustrated’ customers to evaluate the capabilities of a range of (reputedly) more reliable alternatives, including Nokia Maps”.
Explaining Apple Map’s debacle, Tim Cook said, “At Apple Inc. (NASDAQ:AAPL), we strive to make world-class products that deliver the best experience possible to our customers. With the launch of our new Maps last week, we fell short on this commitment. We are extremely sorry for the frustration this has caused our customers, and we are doing everything we can to make Maps better…………………………..…………While we’re improving Maps, you can try alternatives by downloading map apps from the App Store like Bing, MapQuest, and Waze, or use Google or Nokia Corporation (NYSE:NOK) maps, by going to their websites and creating an icon on your home screen to their web app”.
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The iPhone maker claims that more than 100 million users of iOS 6 are using Apple Maps, which clearly points to the “potential damage to Apple’s reputation and instant – though not permanent – loss of active users of Google Maps”. As per the report, Apple’s debacle serves as an example of “investments required to make Mobile Maps a fault- and flaw-free user experience”. The report points out that unlike Apple Inc. (NASDAQ:AAPL), Google Inc (NASDAQ:GOOG) and Nokia have invested around $10 billion in improving and perfecting their data bases, and value added applications like traffic, public transport, turn-by-turn, street-view, augmented reality etc.
Citing reasons for the Apple Maps deficiencies, the report said “ the chief reason, why Apple Maps is so deficient is management’s choice of the supplier of the underlying data: TeleAtlas (TomTom) and Yelp. Had it elected to draw requisite information from Google (as before) or Nokia (NAVTEQ), then this embarrassing episode would never have occurred. One way ‘out’ for Apple would be to replace TeleAtlas and Yelp Inc (NYSE:YELP) with NAVTEQ (unless it is brave enough to re-install Google Inc (NASDAQ:GOOG) Maps), as Nokia did back in 2007”.
The report from ABG values Nokia maps to be worth around EUR 6 billion. The report believes that Nokia maps “could be worth more than its imputed enterprise value – leaving, by simple extension, ~EUR 30-35bn of mobile devices and networks sales, and one of the world’s most enforceable and precious telecommunication patent portfolios essentially ‘free of charge’”. On the importance of Nokia maps to Microsoft Corporation (NASDAQ:MSFT), the report points out, “this is part of Nokia Corporation (NYSE:NOK) that Microsoft must be very keen – operationally and strategically – to control”.