There has been a ton of speculation about the Apple Maps announcement this week. The announcement was perhaps the worst kept secret of the event. Everyone knew it was coming. Google and Apple have a huge need for you to use their phones for your location based activities so that eventually when the mobile advertising market grows up, they can capitalize. What better way to capture your location based activities than to create a robust app that navigates you whether driving, walking, biking, or using public transportation. Neither Google or Apple could care less about the navigation itself. They care about knowing about your navigation. And therefore, both have now planted both of their feet firmly in the navigation app space. The only way to do it, they believe and I agree, is to provide a robust navigation app that will be your go-to solution for all forms of personal navigation so they have a constant opportunity to serve you mobile ads.
What does this Apple announcement mean? No one knows for sure but here are my thoughts.
TomTom
No one knows the details of the relationship between Apple and TomTom for sure, other than the very short press release that TomTom released. The only fact that we know is that Apple is using TomTom's maps (TeleAtlas actually - owned by TomTom). What we do not know is:
1) Did Apple only buy the underlying mapping data from TomTom (TeleAtlas) and Apple built their own UI on top of that underlying mapping data?
2) Is the routing algorithm TomTom's or Apple's? If TomTom's, does it use IQRoutes data?
3) Will Apple's crowd sourcing feed back into TomTom to support TomTom's IQRoutes feature?
4) Will Apple's crowd sourcing traffic feature feed back into TomTom's traffic service?
If Apple only bought "dummy" map data from TomTom then in my opinion TomTom sold it's soul to the devil because of it's reportedly precarious financial position. Apple has a lot to prove in terms of their ability to develop their own routing algorithm and ETA calculations if they are not using TomTom's. Only after consumer use of the new app will we know for sure how good they are at this new game.
I've said many times that TomTom's main remaining value in the US is it's intellectual property: IQRoutes and HD Traffic. Those two services need users, and lots of them, or these features wither and die. Without users, TomTom cannot sustain the accuracy and timeliness of these features. And without those features, TomTom has little to offer the US consumer that is unique. TomTom already missed the boat badly in the US by not expanding their user base by adding Android users.
We know that Apple has announced that the Apple Maps app will feature crowdsourced traffic. What we do not know if is if it will also contain historical traffic. If it does, this would presumably have to be TomTom IQRoutes because Apple has no history in this space by which to have any historical traffic data. If it does not use historical data at product launch, then Apple has a long way to go to catch up to their competitors. Not having historical traffic data would be a bad sign for those hoping that the Apple Maps app will be back feeding TomTom's IQRoutes and HD Traffic.
If Apple's app is not back feeding TomTom's IQRoutes and HD Traffic then that is a clear sign of the trouble that TomTom is in in my opinion. Apple clearly has the user base to build up their own data that would resemble IQRoutes and HD Traffic. It would take them several years, less in larger cities, but they clearly have the user base to build it like no one other than Google can. It would appear that Apple does not necessarily need TomTom, except for a short term jump start. Clearly the release of Apple Maps will cause a significant reduction in sales of TomTom's own iPhone app. There would be little to justify the expense. If Apple is not using IQRoutes or HD Traffic, then those features would remain as selling points for TomTom's own app, but that advantage will be short lived as Apple builds up their own data. And Apple's own app will likely simply be more fun to use anyway, further drawing users away from TomTom's own paid app. The Apple app will be integrated with Siri and you can bet that Apple will nail the UI.
If Apple Maps is not feeding back into TomTom IQRoutes and HD Traffic then those features, in my view, are dead in the US. Apple Maps will drastically draw users away from TomTom's own apps, their PND's are already in deep decline. There simply do not appear to be enough users out there using IQRoutes and HD Traffic "feeder devices" to make those features viable.
After all of that explanation and speculation my prediction is that Apple buys TomTom.
Garmin
Garmin's public comment downplaying the impact of Google Maps screams of a historical 800 pound gorilla still trying hard to be seen as the major player it once was in the industry. Garmin is positioning itself as the "premium" player in a market of less-featured free or freemium solutions. The problem with that strategy, as I pointed out in previous blog posts, is that their so called premium devices are typically full of "half baked" features that never seal the deal. They get their devices 85% right in my view, but never finish the 15% of the features that would truly put it over the top, justify its high cost, and make it too good to pass up. Instead, they are onto developing another 10 skus of product, end-of-life'ing devices after 12 -16 months and trying to convince me to pay another several hundred dollars for the next "latest and greatest" device. Fool me once Garmin....Actually you fooled me twice, I just bought a 3590 after owning nothing since the 885. Not sure there is another Garmin device in my future that I can see.
Garmin is the only major player left that is at the mercy of a twice removed company for its core foundation - the maps. Garmin is at the mercy of Navteq, who is in the hands of Nokia, for its maps, a problem that no other player has. Part of Garmin's premium justification is Navteq maps - once the clear premier mapping provider. In the hands of Nokia, I am not sure Navteq remains in that position long term.
The future of Garmin's app on the iPhone seems destined to niche status, perhaps only for those customers sophisticated enough to know that they want Navteq maps and are willing to pay the fee, or for customers that still are blindly brand loyal to Garmin.
Garmin has no play in the Android space. Google will continue to exert pressure on Garmin and Garmin simply has no answer. Smartphone Link (Garmin's Android app that mates to a Nuvi via bluetooth) appears to be a lightly used niche app as evidence by the download numbers. For the record, I use the app and love it.
Garmin's problem with Smartphone Link however is that it holds my phone hostage because of its use of my bluetooth connection. That means I can't use a bluetooth headset, I can't use the bluetooth phone feature of my car and I can't use the bluetooth telematics feature in my car with its in-dash apps. Am I willing to give that up long term just to maintain my Garmin Nuvi? No. Smartphone Link is Garmin's Android v2.0 strategy and I think this will also be short lived, like the phones they tried a couple years ago.
Garmin seems only to be able to compete by convincing customers that premium PND's are the way to go. I don't see a competent and sustainable go-forward strategy yet from them to compete in a smartphone dominated world.
My prediction: Garmin buys Navteq from Nokia and tries to position themselves as the premium map set and the premium navigation solution. They may get smart about developing an Android app and continue their iPhone app development and also position their apps as the premium answer to the free alternatives. Whether they have enough features to truly differentiate and justify their premium cost remains to be seen.
Google
Frankly, I don't see Google impacted much by Apple Maps. I don't see that iPhone users make up a significant portion of Google's crowdsourcing user base. I don't see that Google's data will miss these users much. I also don't think Apple Maps will convert any significant quantity of Android customers. I just don't see that Apple Maps provides any advantage over Google Maps. I think that iPhone customers will remain iPhone customers and Android customers will remain Android customers. There is no doubt though that there will be a huge competition between Google and Apple to see who has the best navigation app to attact new users. This is a win-win for consumers. We can expect great strides from both players as they try to one-up each other.
Inrix
I don't know what to think about Inrix. I like their app and I like their traffic content, but I never use their app. Why? Because knowing the existence of traffic is only part of the equation. I want to know what to do about it and their app (at least for Android) doesn't tell me that. Frankly, the Inrix app is just not an app that will get my attention on my phone right now. From what I know, I don't see that Inrix has any role in either Google or Apple in this new smartphone navigation app battle. I am not knowledgeable enough about their business relationships to comment on what role Inrix has going forward that would have a direct consumer impact.
Others
I don't consider the other players worth spending much time on at this point. This is clearly a Google versus Apple battle. Players like Waze offer a unique solution. But I can't see them offering a compelling enough case to draw customers away from Google or Apple in enough quantity to create critical mass for their own crowdsourced apps. I see Waze as a small niche player that will drawn numbers similar to Open Street Map or Mapquest. Actually, I would bet good money that Waze will be acquired at some point.
ALK, TeleNav, Sygic, NDrive and the others have no upside in my view. There is just no compelling story here for any of them to justify not using Google or Apple. Once the general public gets a taste of the power of crowdsourced historical and real time traffic, these small niche players that don't have that data will have a hard time making a case for their app. Perhaps the inclusion of Inrix data in some of these apps will continue to be a compelling enough drawn for some people that are smart enough in this industry to know the difference and care but I have a hard time seeing a long term business case for these other players.
The same goes for the small PND players like Magellan, Rand McNally, etc. These players will turn into niche suppliers for specific industries like trucking, RV/Motorhomes, etc.
Conclusion
Who knows? How is that for a conclusion? We all talk smart about what will happen but the truth is that none of us know. I see:
1) Google continuing down their current path, crowdsourcing map data, using their users as probes for their historic and real time data, and using field vehicles primarily for streetview.
2) Apple will get a few months into their Apple Maps app and determine their confidence in building their own map data (ala Google) including using their users as probes to build their own historic and real time data. If they see roadblocks or think the data is building too slowly, I can see Apple making a play for TomTom to get TeleAtlas. I could also see Apple buying Waze instead to get the technology that Waze has and apply it to the user base that Waze doesn't have.
3) Garmin will remain as the viable premium old-school player in the market, still trying to convince the user base to buy dedicated devices. I can see Garmin making a play for Navteq as a fire sale from Nokia and trying to mold themselves into a services and software company. Their play could be premium map data, not relying much on crowdsourcing, built into premium apps and dedicated premium PND's.
That is my two cents on recent events.
