Apple stumbles in delivering web services

21 Sep, 2012

Apple's decision to replace Google Maps with its own mapping software in its latest iPhone has caused controversy among some users, many of whom took to its forums and social media sites to protest this week.

However, the move is consistent with Steve Jobs' founding vision that Apple should control every aspect of the company's products.

As the iPhone 5 hits the streets on Friday, Apple faces a crucial test of that vision. Samsung, its biggest smartphone rival, is reliant on Google's Android operating system, which is offered to any manufacturer that wants it. This has led to Android dominating the global smartphone market.

Apple controls the main elements of the iPhone, right down to its A6 processor, something early reviewers of its latest smartphone credit with the phone's superior performance.

But as the backlash against Apple's Maps app shows, it remains to be seen whether that high quality can be extended into internet services – an increasingly important area of competition between smartphone makers.

In contrast to its near-universally acclaimed hardware, Apple's efforts in internet services have not been without stumbles.

Apple's first foray into "cloud" iPhone applications with MobileMe in 2008 was met by mixed reviews and system failures which left users without access to their email for days.

Its successor, iCloud, has been more successful since its introduction last year, attracting 125m users. However, last week, just under 1 per cent of iCloud users were affected by an email outage, something almost unheard of from Google's Gmail.

Despite Android's popularity, Apple can still boast the largest and most vibrant community of independent app developers, with IHS Screen Digest forecasting that customers will buy $4.9bn worth of apps this year, up from $2.9bn in 2011.

"Clearly, Apple believes in vertically integrating applications, operating system and hardware and that designing those things in tandem delivers a better overall user experience," says Ian Fogg, a mobile analyst at IHS. "But Apple has always benefited from and encouraged third-party developers."

Apple is relying on developers to create Maps apps that will fill in some of the missing features, such as transit directions, Mr Fogg says.

But the early difficulties has presented an opportunity for Apple's competitors, which was not missed by Nokia, which in 2007 acquired mapping company Navteq for $8.1bn.

"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," Nokia's Pino Bonetti wrote in a blogpost on Thursday, noting Navteq's "20 years of knowhow".

"We also understand that 'pretty' isn't enough," he added, in a dig at Apple's 3D models of buildings and landscapes in its maps' "Flyover" mode.

Some analysts say that the current outcry over maps is exaggerated and will pass over time. "For many consumers much of the time, the [iPhone] map will be adequate," says Sarah Rotman Epps of Forrester Research. "It won't impact on iPhone sales, but it eats away at Apple's image of being perfect and infallible."

Online maps improve with mass usage, Ms Rotman Epps notes. Google has several years of data about search queries and users' locations, from the iPhone and its partners' Android devices, with which to refine its maps.

Apple does not yet have this real-world data and it could take many months to accumulate. Google's typical form of product development, where services are tested in public "beta", sometimes for years, stands at odds with Apple's perfectionism. Many Apple observers were surprised last year when the iPhone 4S's new voice assistant, Siri, was given a beta tag, because its products are usually released fully formed.

To avoid a protracted beta test of its new Maps app, Apple looked beyond its Cupertino labs, drawing data from suppliers such as TomTom. Apple has also integrated other third-party internet services into its operating system, such as Yelp listings, and Facebook and Twitter social networking.

Facebook's alliance with Apple came after the iPhone maker abandoned its own music-centric social network, Ping, which is being shuttered at the end of this month. But just as Apple ended up competing with its mapping partner Google, the alliance may not last for ever. Some analysts predict that Facebook will at some point create its own smartphone operating system, despite denials by chief executive Mark Zuckerberg that it is making a phone.

Whether Apple can manage this balancing act will be a key test for chief executive Tim Cook, whose excellence in managing Apple's hardware manufacturing and supply chain as chief operating officer made him an obvious choice to succeed Mr Jobs.

"One of the defining forces of the era we are in is everyone is a 'frenemy'," says Ms Rotman Epps, referring to a phrase popularised by WPP chief Sir Martin Sorrell to describe a company who is both friend and enemy. "You compete with your partners and you partner with your competitors. That defines the norm in the tech world."

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