The past few years have seen maps become one of the most important elements of the mobile platform, underpinning the shift to location-aware services as an important driver of consumer behavior and vendor revenues. So it is no surprise that there is fierce attention to the latest moves by the major players, with Nokia emerging as the disruptive element now it is giving its Here business unit full autonomy.
Apple famously messed up its first launch of its own mapping platform, doing Google a significant favor with the piles of flaws in iOS 6 Maps, which appeared in September 2012 ‘ even though the main objective was to reduce the presence of Google on the iPhone and divert revenues from location driven services to Apple itself.
That objective is closer to being met now, with significant improvements in the mapping software that accompanies iOS 7. However, there is still a long way to go to match the functionality of Google Maps and Nokia Here, and of course, these two will be working hard to move the goalposts further. And they have the advantage of not being tied to one piece of hardware. Though Google is trying to reap the rewards of an integrated hardware/software platform, its real power lies in getting Android, and services like search and maps ‘ with their associated revenues ‘ on as many devices as possible. Apple’s mapping share is, of course, directly linked to the market share of its hardware, and that is being squeezed.
Nokia, by contrast, has taken the opposite path from Google and was severing ties between its mapping software and its hardware even before it decided to sell its device unit to Microsoft. This will leave Nokia Here as a dedicated business unit in the new Nokia ‘ far smaller than the NSN infrastructure division, but with strong profit and growth potential. Nokia has leapt ahead of its major rivals in some areas of functionality, particularly its cloud-based capabilities, and has been smarter at adapting its platform for non-handset markets such as automotive.
With its handset market share dwindling, and its smartphones soon to be sold off anyway, there are none of the conflicts of interest which some licensees may experience with the powerful Google, and Nokia will also hope to tap into its still-strong ties with operators and consumers in major emerging markets like India. It has always been more aggressive about building localized content and services than its western-focused rivals, and as cellcos and local device or web players start to build their own platforms in India and elsewhere, Here could find a valuable new base.
For now, it has already attracted powerful licensees such as Microsoft itself, Amazon and a range of car makers, and now it even has a tie’up with Samsung. Admittedly this is for Tizen, not Android, but as the Korean giant increasingly asserts its software identity and builds a de-Googled platform, the links with its old Finnish rival will be a deep concern for Google (and Apple, if a differentiated location experience on the Galaxy steals even more share from the iDevices). As Nokia Here gains greater freedom to bid to become the web’s dominant location system, when the divorce from the handsets is finalized, the deal m could conceivably spread to Galaxy.
Certainly, Nokia will hope to be the default choice for any new software platform. It has already snapped up Tizen and Jolla’s Sailfish, and will be better positioned, thanks to its auto experience, for deals with vertical and ‘internet of things’ players.
So it will be vital that Google leapfrogs Nokia with its next Maps release. Since the company has, riskily, decided it must have its own hardware in order to showcase and drive uptake of its services, it will also be vital to achieve real scale with the Nexus and Motorola products, so that Google’s own take on Android is widely seen and used.
Google is promising dramatic changes to its own maps to help fend off the Nokia/Microsoft alliance and Amazon. Some of these changes will be a while coming, but the search firm has a big vision for its platform, though some of its ideas about context awareness and personalization clearly echo those set out by Nokia Here executives this year.
Bernhard Seefeld, product management director for Google Maps, told the GigaOM Roadmap conference recently that future software will ‘build a whole new map for every context and every person’, incorporating all kinds of information about the individual and updating this constantly. He added: “It’s a specific map nobody has seen before, and it’s just there for that moment to visualize the data.”
Pushing a major theme at Google this year, Seefeld talks about applications creating emotional connections for users – “emotional maps that reflect our real life connections and peek into the future and possibly travel there’. This will involve context-aware maps that combine location and personal data, some of that taken from other Google apps, particularly its Google Now personal digital assistant ‘ mainly seen as a response to Apple Siri, but in fact far broader in scope, and with a powerful artificial intelligence engine.
As well as integrating information on a user’s preferences and activities from many sources, the map could then present this in highly visual ways that go well beyond the current graphics. In particular, personalized maps would become interactive, enabling the user to zoom in on certain areas to gain additional information ‘ the scores at a sports stadium for instance ‘ or exchange views with friends.
All that will mean updating the mapping engine itself to ensure it is detailed and up-to-date, and this remains a challenge, especially in urban areas where businesses open and close rapidly. One approach may be to integrate sensor data in future, to add accuracy and provide additional data.
However, Google will be investing significant resources in this effort, via inhouse R&D and acquisitions of start-ups. So will Nokia, of course, which is also using big words to describe its vision for maps. Recently it set up a light show at London’s Spitalfields Market which used optical illusion to create images out of apparently random lights. In Nokia’s view, ‘this optical illusion is a metaphor for the future of cartography. Our thinking is that as mapmaking evolves so must the tools used to collect and translate the data. As the tools of the mapmakers of the Renaissance were the quadrant, the sextant and the astrolabe, the tools that enable the up-to-the-minute mapmaking of Here are cars equipped with sophisticated motion sensors, 360-degree cameras and laser light radar (Lidar) that can capture up to 700,000 3D data points per second.’
So can Apple, which has also been snapping up mapping start-ups, keep pace with these two giants and ensure that virtually no iOS user switches on a rival app? Figures from market research firm ComScore indicate it is making some progress. The company calculated this month that Google Maps has lost nearly 23m mobile users in the US in the past year because of the availability of iOS Maps, which of course is the default on iDevices. That is down from a US peak of 81m mobile users at the peak, just before iOS Maps’ launch in September last year. A total of 35m iPhone owners in the US used Apple’s maps during September 2013, the survey says, compared to a total of 58.7m Google Maps users across the iPhone and Android base (about 6m of those on the iPhone).
Although the research did not extend beyond the US, many expect to see a similar pattern in Europe, which will make Google (and Nokia) heavily reliant on growth in markets where the iPhone has limited share, such as India.
The war is a vital one because maps support many revenue-generating services like targeted adverts and promotions and enhanced search, as well as providing Apple and Google with important data on their users’ behavior and preferences, and on the performance of their devices on networks.
And another important element of the research (and other studies) is that Google Map consumers use maps and location more heavily than their iOS counterparts ‘ a higher percentage use maps regularly, and more frequently. That is very important. Even if Google and Nokia cannot penetrate the iOS base because Apple has made it so easy to default to its own software, they can hope to make their own offerings so superior that it will help woo customers away from iOS. And if their software encourages higher levels of usage, that will generate greater revenue potential and attract licensees and advertising partners.
The commercial importance for Google of keeping control of its own Android experience and apps was highlighted this week by a report from Citigroup, which calculates that the search giant could generate $1.3bn from Android apps this calendar year. The firm’s Mark May expects average revenue per Android user to be $4.59, and there are about 900m Android devices in use. That adds up to $4.2bn, of which Google takes 30% before its own hosting/management costs. He also estimates that, over the next four years, Google Play revenues will reach at least $17bn, of $5.2bn for Google. That does not include the revenue from mobile advertising driven by Android services, which could increase the 2017 figure to over $7bn.
This fight is one of the most important in the mobile platform, and will only intensify as user behavior shifts to the cloud and new HTML5-based operating systems come to the fore. Neither Google nor Apple can ignore Nokia in this space, even if they can in handsets ‘ and alliances with both Samsung and the auto industry may prove very dangerous indeed.