File Under: Why Apple Built iOS Maps, and Why Google Should Have Played Nice

Scott Francis
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Statistics from EE show that Apple’s iOS maps dominate usage on their network:

Traffic on the new Apple Maps now represents 70% of mapping traffic on the 4G network, from 60% in the second half of 2013, taking market share from Google maps, which is down 7ppts. This difference is even more marked over 3G where Apple Maps is up 19ppts and Google Maps is down 15ppts.

This goes back to a discussion looking backward as to whether Google might have been better off partnering rather than going for the jugular in the mobile space.  As a result of that decision, they’re being cut off from default iOS mapping data and ad revenues, and seeing Search sidelined in iOS – as well as seeing Apple partnering with other firms to further segment search-like behavior by expertise (restaurants going to Yelp or OpenTable for instance).  It didn’t have to be this way.  In 2008, Apple and Google were great partners, as far as any iPhone customer was concerned.  Google’s desire to compete with everyone in every market has not been beneficial for the customer experience. The Google apps experience, and Gmail experience, on iOS has suffered from this decision.  And in the Android market, they may find a splinter of Android in China as a threat to their ecosystem because the splinters won’t have Google services embedded… and in the future may foster competitive services as a result.

Steve Jobs’ advice was pretty straightforward.  Focus on doing a few things insanely great – and discard the rest.  Google has profoundly dismissed that advice in their pursuit of competing in every category.  It isn’t clear to me that that was the right long-term move.  And data points like the one above show the chinks in the armor.

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  • Bogdan

    Google had no choice but to compete. As a software business they had to make sure the hardware distribution remained competitive, otherwise they risked getting stronghanded by the hardware players. So far it’s been working well for them. Google Play Services (the monetization engine of the Android market) has become the second largest revenue stream next to advertising. Mobile OS market shares: iOS = 12%, Android = 84%.

    Also, Steve Jobs was famously wrong about key aspects of the initial iOS business model, like the need of an app marketplace. He felt he would be losing the grip over the software experience. Now imagine what the market share of iOS would be with an appstore of several hundred Apple apps, instead of the one million 3rd party choices now… So he did go out and started doing things that were traditionally outside Apple’s comfort zone – appstore, cloud etc.

    • First, it is clear they had a choice. Google continues to distribute its software successfully on iOS. In fact, even in 2013 Google made more money off of iOS devices (advertising+services) than they did from Android devices… figure that one out. That means, if android users were iOS users instead, Google would make more money. Nuts. And without the expense of writing Android and supporting a bunch of hardware manufacturers… iOS 12% (let’s just take that as the number) produces more revenue for Google than Android’s 84%… for Google).

      Second, the second largest revenue stream at Google? Advertising is 96%… so second largest isn’t too big for Google…

      To the third point – yep, Steve Jobs was not always right the first time. But not sure that disproves his advice to focus. It wasn’t the comfort zone that is lack of focus, it is the number of things you tackle well. It took Apple a long time to make “cloud” a seamless part of the backend, rather than a second-rate service. And iOS maps is another good example – hard to get right. Seems easy to just compete right? But it takes years to build a credible Google Maps competitor. Google just made the bad call of assuming Apple couldn’t do it…

      My thesis is that Google could have reaped most of the benefits of Android by treating it as a truly open source project with a modicum of support from Google, but without control, and without taking the blame for copying iOS after the iphone’s release in 2007. And then Google would have had alternate platforms for its services – android, windows, iOS… and arguably might have better iOS apps as a result. If iOS captured a larger share of the market, Google might have even made more money ;)

      Another note: Facebook seems to be doing fine without hardware. And lots of other software companies as well. Owning the platform is a big advantage, but it isn’t the only path to success, far from it.

      • Bogdan

        Google Play is now (2014) 10% of Google revenue, which is indeed a ~2.5x growth from year ago, when it was only 4%. Considering that Google clearly plays a long-tail model with Android and Play, I think this is proof it’s working out pretty well for them:

        http://techcrunch.com/2014/06/23/google-play-quarterly-app-revenue-more-than-doubled-over-past-year-thanks-to-games-freemium-apps/

        I still believe Google had no actual choice. Apple is well-known for squeezing its suppliers and forcing them all to their own policies and strategy, which would at a certain point become conflicting with Google’s goals. E.g. the two companies have opposing views re: user data monetization – the clash was imminent.

        Facebook is doing fine because the hardware space is already diversified and maturing (all major Android manufacturers, other than Samsung, started turning to profit). If Apple would have captured the majority share, they would have done the same to the Facebook partnership.

        Google saw the same threat on desktop OS, that’s why it created Chrome. Which is another, similar to Android, long-tail play, not yet monetized but growing healthily.

      • We’ll see what the revenue ends up being at EOY. I don’t believe it will be 10% unless they are reclassifying ad revenue toward android. Note: the market wasn’t in danger of being iOS only when Apple came out – they could never produce enough phones for that. The only risk to google was that the other platforms would be (one or more of): blackberry, symbian, windows phone, palm OS. All of which are good targets for Google’s services if they had market share. Primarily Android has eaten that market share, at great cost to Google. Including the cost of getting marginalized on the iOS platform…

        As for choice: there’s always a choice. When someone tells you they “have no choice” – it usually means they are operating from fear rather than confidence. And often it is used as rationalization for backstabbing (which is how Apple perceived the change in focus for Android).

        I think Google could have approached android much more hands off – and truly let it be an open source project – without the fallout they incurred, nor the IP costs (buying Moto for $12B), etc.

        As for the OS and Apps – this is just Google trying to suck margin/profit out of other companies’ businesses (commoditizing the complements), it isn’t about being threatened. They’re waging battle with anyone who is in the software business :) Who are their friendlies anymore?

        re: android phone makers – the ONLY one making a profit is Samsung. Yes, their profit is down, but they’re literally the only one making a profit over the last 3 years. Apple + Samsung = more than 100% of hardware vendor profits…

  • Update from today: iOS accounts for 53% of mobile ad revenue… even today.

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