iPhone Sales May Perk Up but the Maps App's Another Story
Even though investors punished Apple for only selling 5 million iPhones in the product's first weekend rather than the 10 million some analysts had predicted, the iPhone 5 is a success. It has outsold the 4S by 1 million in the same time period after release, and lots more will be sold. The maps app, however? Now that's a different story.
09/26/12 5:00 AM PT
Apple's iPhone 5 is a loser, judging by the market's response. Apple reported moving 5 million phones in the first weekend following its launch, despite despite lingering disappointment in the homegrown maps technology it released with iOS 6.
While other smartphone makers might have killed for that kind of sales performance in one weekend, Apple's stock fell after the numbers were released. It was more than the 4 million iPhone 4S devices that Apple sold about a year ago. However, following a week of Wall Street predictions that the company could sell as many as 10 million iPhone 5s right off the bat, excluding supply restrictions, the 5 million was viewed as something of a letdown.
Apple shouldn't get concerned with the seemingly low sales, said Shaw Wu, analyst at Sterne Agee, noting that the larger screen and 4G LTE wireless capabilities addressed some iPhone users' biggest concerns and aligned it more to some of its competitors best-selling devices.
"This is a bit slower than estimates as high as 10 million, but we are not overly concerned as this is still a big number and believe this is more a matter of high expectations getting out of touch with reality," Wu told MacNewsWorld. "To us, it isn't about how well a product does in a few days but how well it does over the next two to four quarters. We continue to believe iPhone 5 is a significant update and will drive a powerful product cycle."
While new customers praised the larger display and quicker speeds, though, Apple's updated operating system that runs the iPhone 5, iOS 6, took a lot of heat for its new mapping technology. For the first time, Apple dumped Google's well developed Maps platform and opted to build an in-house mapping system of its own. The decision may have given Apple the control it typically craves for its products, but the new navigation app is taking a lot of criticism for falling far behind Google's technology.
"There are many major problems in the current version of Apple Maps," Ming-Hsiang Tsou, professor in the geography department at San Diego State University, told MacNewsWorld. "The worst aspect is the problematic new navigation systems. Although the new Apple Maps finally have 'Voice Navigation' function, their Point of Interest (POI) databases are far less than Google Maps and the routing engines with street info are also way behind Google Maps. Apple did partner with Yelp for the sources for its POI's. But Yelp's POI's do not cover all the street lights and stop signs in the real world."
In short, said Tsou, Google's years of Street View cars and work with navigation experts to develop a complex mapping infrastructure can't compare to Apple's first efforts in the field.
"The second biggest problem is the missing of Street View function in Google Map," he said. "Street View can give users a 'reality check' and be very useful when you visit a new place or want to find a parking lot entrance," he said. "Google owns Street View and it has developed amazing technologies to capture Street View. I don't think Apple can catch up Google's Street View coverages within two or three years."
Refresh in Sight?
Last week there were some reports that Google would release a maps app for iOS 6, but the search giant's CEO told reporters Tuesday that no such plans have been made. To do so, the two would most likely have to collaborate on app technology, which would defeat Apple's purpose of breaking away from its competitor in this space. Apple isn't wrong to want that control, said Tsou, but if it's serious about competing in this category it needs to re-organize resources to build a worthy map infrastructure.
"From a strategic perspective, it is the right move," he said. "But Apple used all the wrong methods during the development of its own Maps. If Apple can adopt better strategies and invest enough money, maybe increasing their mapping team members 100 times, then it is possible to have an advantage over Google Maps within three or four years."
To equal the playing field, or even to top Google Maps, Apple should reach out to strategic partners, said Tsou. Yelp is a strong partner for possible location-based services advantages and for users looking to their maps for entertainment options, but a true map needs more street signs, names and landmarks to qualify as a Google Map competitor.
"My guess for a good partner would be ESRI, who is the leading expert in GIS and mapping, and Microsoft, with their very nice Bing Maps," he said. "Microsoft is a long shot because it also has its own mobile competing with Apple, but who knows? Maybe Microsoft can be a friend of Apple again, like 30 years ago when they worked together.
Apple did not return our request for comment on the story.