Understanding Apple vs Google Maps – Deep Analysis, Early Trauma
Jaan is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
In her well thought out post titled Google vs. Apple: Who Has the Most to Lose?, fellow Fool blogger Tamara Rutter describes the battle of the map-space between Apple (NASDAQ: AAPL) and Google (NASDAQ: GOOG). While she makes many fine observations, Ms. Rutter, like virtually all other bloggers, misses the deep, strategic point that motivates Apple.
iOS 6 Maps with Flyover.
Too many people assume that the main reason for this competition is the jealousy and rivalry over the Android operating system. There is, however, another more important reason for Apple entering into the mapping space.
This is, as I have pointed out before, the fact that Apple is strategically adverse to relying on any other company, particularly a competing company, for any core technology - that is to say, any technology that is mission critical to its user experience. People should never underestimate the power of this driving motivation. It is based on a deep historic trauma.
In the 1990's, Microsoft (NASDAQ: MSFT) drove Apple almost to extinction by its manipulation of two core technologies Internet Explorer and their Office Suite.
The problem was, it was not really compatible. Anyone who made an effort to do web programming at the time, remembers the painful measures necessary to program to cover all the different platform/browser combinations. There was IE vs Netscape and then each one of these on Mac OS versus Windows OS, and each of these as separate version number of the browser that was in use. Because of the incompatibilities in each of these combinations of software and system, programmers had to develop long complex code, sometimes referred to as spaghetti code. When you add to this the fact that all programed web pages then had to be tested on each one of these platforms with each different browser version, it is clear to see why the Mac OS platform was very frequently left out altogether, and many sites simply put up a message “Your platform is not supported.” "Not supported" was one of the factors driving down Mac sales.
(It might be noted, that this all was a major motivation for Apple in creating its own Safari browser - so that never again would its web presence be subject to the control of other entities by manipulating compatibilities to the programming standard.)
Ultimately, the United States government sued Microsoft for abuse of monopoly power. “Underlying these disputes were questions over whether Microsoft altered or manipulated its application programming interfaces (APIs) to favor Internet Explorer over third party web browsers…” [Wikipedia]
“Judge Jackson issued his findings of fact on November 5, 1999, which stated that Microsoft's dominance of the x86 based personal computer operating systems market constituted a monopoly, and that Microsoft had taken actions to crush threats to that monopoly, including Apple, Java, Netscape, Lotus Notes, Real Networks, Linux, and others.” [Wikipedia]
Some people do argue the validity of this judgment. To my mind, however, I find it hard to believe that Microsoft, which made IE for Windows, was unable to make a compatible version for Mac OS. I firmly believe that Microsoft used this as a wedge to marginalize both Mac OS and Linux, as well as any other operating systems that threatened its hegemony in the marketplace.
Even after the Apple/Microsoft collaboration announcement in 1997, IE continued to be incompatible.
In the old days, one of the big arguments against the Mac operating system and Macintosh computers, especially in the enterprise, was that they were incompatible. This was in large part due to IE incompatibilities. Perhaps more importantly, was the fact that documents from Word and Excel were not compatible with Mac versions of the same programs. While this ostensibly changed in 1994 with the release of Microsoft office 4.2 for Mac, IT personnel in the enterprise continued to erroneously believe for many, many years that the Mac remained incompatible. This flawed meme was used over and over again by corporate IT in order to keep Macs out of the enterprise. Microsoft, of course, did little to enlighten these people.
The important thing to note is that this incompatibility, both in browser and in the critical Office Suite, was a major factor in marginalizing Apple’s Mac computers. And this gets us to the point in hand.
Apple was deeply affected by this manipulation by Microsoft. In fact, it was nearly driven out of business. In 1997, Apple announced at the MacWorld conference that it was entering a strategic partnership with Microsoft. Many believe that this was driven largely by the threat that Microsoft would quit developing the office suite on the Mac OS.
To repeat: for these reasons, Apple is strategically adverse to relying on any other company, particularly a competing company, for any core technology.
On mobile devices mapping is a core technology. It is one of the most used features of smartphones, and owneres rely on it heavily. A 2010 survey by Nielsen showed it to be the fifth most popular activty on Android and iOS smartphones with aproximately 70% of owners using this feature. Clearly this is a core feature!
Therefore this is the true reason that Apple is developing its own mapping technology for iOS.
Malcolm Manness has a Masters degree in Computer Science, and has worked for 14 years in development, technical publications and software quality assurance. He has been investing for 20 years. Currently, he does FileMaker Pro programming on contract.
He publishes short fiction at 50¢ Flash Fiction (under pseudonym J. Seunnasepp).
==== Understanding Apple series
You may love Apple and their products, or hate them to the core, but you cannot deny that Apple now has the highest market cap of any company, their products are trend setters, and currently they are trading at rather low multiples, especially regarding forward earnings.
Warren Buffet has the maxim: “Invest in what you know!” So, for those who want a unique perspective on Apple’s success, I have a series of articles Understanding Apple. I hope you will find them helpful and provocative.
Let me know what you think.
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