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Anh Hoang
Anh Hoang
Articles (264)  | Author's Website |

The Continuing Glitch of Apple's New Maps App

October 02, 2012 | About:

In June 2012, Apple Inc. (NASDAQ:AAPL) decided to replace Google (NASDAQ:GOOG) Maps iniOS 6 with its own mapping service, developing its own "geocoder," which translates a phone's longitude and latitude into a point on a map. That decision was quite a surprise to Google. Apple had no choice but to replace Google Maps with its own application because of a disagreement in voice-guided turn-by-turn driving directions, many sources have said. When being asked when iOS can get a new Google Maps app, Google answered: "We believe Google Maps are the most comprehensive, accurate and easy-to-use maps in the world. Our goal is to make Google Maps available to everyone who wants to use it, regardless of device, browser, or operating system."

Dated back to the time of the first iPhone, Google Maps was a first-party app. In the partnership of Google and Apple at that time, Google was the provider of back-end data whereas Apple set up the front-end app. Just shortly after a launch of the first iPhone in 2007, Steve Jobs and Bill Gates joined together in an interview at All Things D's D5 conference. In that interview, Jobs said about its strategic partnership with Google:

I love Google Maps, use it on my computer, you know, in a browser. But when we were doing the iPhone, we thought, wouldn't it be great to have maps on the iPhone? And so we called up Google and they'd done a few client apps in Java on some phones and they had an API that we worked with them a little on. And we ended up writing a client app for those APIs. They would provide the back-end service.

Jobs admitted that he didn't want to do everything. He wanted to focus and make strategic partnerships to deliver the greatest customer experience:

We don't think one company can do everything. So you've got to partner with people that are really good at stuff. Like, we're not, I mean, maybe Microsoft is great at search. We're not. We're not trying to be great at search so we partner with people that are great at search. And we don't know how to do maps on the back end. We know how to do the best maps client in the world, but we don't know how to do the back end so we partner with people that know how to do the back end.

Several days ago, Apple CEO Tim Cook wrote about iOS 6 Maps app in his letter to customers on Apple's website: "At Apple, 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." He suggested users try App Store and Web Alternatives, including Bing of Microsoft (NASDAQ:MSFT), MapQuest of AOL (AOL) and Nokia (NYSE:NOK). What a move!

When Jason Matheson tested an iOS 6 Maps in Canada, he found that out of 2028 cities and towns searched, only around 400 results were actually correct, 389 were close but not good enough, 551 were clearly incorrect and 668 are not even on the map.


The new Maps app project has been led by Scott Forstall, Apple's senior vice president of iOS software who is referred as Apple's potential CEO in the near future. Recently, Forstall has been blamed because of the app's glitch. Phillip Elmer-DeWitt of Apple 2.0 said that two recent projects, Siri and Maps, which were under his leadership, have been a disappointment.

Apple has been off from a $700 price tag in the stock market. Currently it is trading at $659.39 a share. The total market capitalization is $618.12 billion. The market is valuing Apple at 15.5x P/E, 5.5x book value and 11.9x cash flow.

About the author:

Anh Hoang
Money manager in global equities, especially in U.S. and Vietnam markets. CFA level 3 candidate. Lecturer for Stalla - CFA course in Vietnam.

Visit Anh Hoang's Website

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