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Apple Needs to Acquire TomTom

Sunday, September 30th 2012
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Summary:

Apple stepped into the mapping world with the release of Apple Maps for iOS 6, and users promptly panned it. Expecting much more from the company that sets trends, users thought Apple Maps failed miserably. So, what should Apple do in response? Editor in Chief Joe Francica suggests that while it’s not an easy fix, a big acquisition is the answer.

Apple CEO Tim Cook’s apology last week, followed by a suggestion that iPhone 5 users should consider using other mapping applications, hints at what the company needs to do next. In light of the company’s failure to produce a mapping application that delivers the content and accuracy expected by the millions of iPhone users, there is only one move Apple should make now: acquire TomTom.

"At Apple, we strive to make world-class products that deliver the best experience possible to our customers. With the launch of our new Maps last week, we fell short on this commitment. We are extremely sorry for the frustration this has caused our customers and we are doing everything we can to make Maps better,” said Cook in a letter posted to the company’s website.

If the company truly wants to get up to speed quickly in the mapping world, it needs to acquire a legion of experienced geospatial professionals. There are already rumors of Apple raiding the talent mills of Google and others. Apple shouldn’t simply hire away talent piecemeal. The best way to acquire the quality professionals needed is to make a wholesale purchase of its primary mapping supplier. Much as Nokia acquired NAVTEQ, Apple needs to go “all in” with mapping technology.  

It’s been an embarrassment to Apple to get this much negative publicity. What Apple obviously considered an insignificant piece of its overall mobile strategy has turned into one of the biggest faux pas in its history of product launches. Who would have thought? And for app developers, how much confidence has this given them that Apple can provide even a capable, let alone superior, location foundation?

TomTom’s financial performance over the last few years has been inconsistent. Its foothold in the portable navigation space has slipped with the advent of mobile navigation apps. TomTom could benefit hugely from a cash influx from Apple’s money tree, perhaps enough to bring it to par with Nokia’s Location and Commerce division, in which NAVTEQ Maps now sits, which seems to have overtaken TomTom, at least in mindshare. Investments by Nokia in LiDAR and indoor navigation indicate that it’s already moved onto the next frontier for location content and the associated byproducts, which could lead to more hyperlocal opportunities in advertising. Let me also state the obvious: Nokia and Microsoft are buddies. Nokia’s Location and Commerce division delivers the location technology for Windows Mobile.  Each company is looking for an opening to exploit in the battle to beat Apple at something, anything.

What Cook found out was that mapping is not easy. Map making is tedious work. And what makes it all the more difficult is that user expectations have soared because of the "Google Effect." Google Earth stamped a huge footprint on the mapping world. We in the geospatial business didn’t know how to respond. Some GIS companies, such as Skyline and Esri, thought that they could duplicate Google’s user-friendly Earth application, but found their reach was limited to a niche audience; they simply could not compete with Google’s much wider user base. Google Earth also influenced mobile location-based advertising, check-ins, social networking, and so many more apps.

And now Apple wants a seat at the mapping table. Cook’s suggestion that Apple users seek alternative mapping programs is an indication that Apple Maps won’t be fixed quickly, which is as it should be. But the only way Apple can "deliver the best possible experience," and exceed expectations as Cook wants, is to make a major acquisition. It can’t go back and buy NAVTEQ and the purchase of smaller mapping content providers is, well, just “kicking the globe down the road." Make the commitment, get in the game and acknowledge that location-content is king. Buy TomTom, and make your transition to the mapping world a little bit easier.


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