In Apple-Google Maps War, Consumers Lose
09/21/2012| 06:09pm US/Eastern
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By Quentin Fottrell
Cutthroat competition is supposed to be good for consumers, but the battle between Apple Inc. (>> Apple Inc.) and Google Inc. (>> Google Inc) over maps shows that isn't always the case.
On the iPhone 5, which went on sale Friday, the popular Google Maps app was replaced with Apple's own maps software. The change was widely panned by consumers, who complain that Apple stuck them with something inferior in an effort to hurt one of its biggest competitors. Apple conceded Friday that the new map software is still a work in progress, and said it would get better with time.
Retail and tech experts say Apple's move is aimed at displacing Google, which has long dominated the maps-app market, which accounts for an estimated $625 million in annual sales, according to Opus Research. While such rivalries often lead to better products, they say the rush by tech companies to register patents on the most basic of smartphones and their features, including map apps, is having the opposite effect. Apple's goal here is to maintain control of its own suite of products--or "ecosystem"--to increase its share of the mobile-phone market, according to Scott Sutherland, analyst at Wedbush Securities.
By building its own map software from scratch, Apple lost its way, say a slew of tech reviewers, calling the app one of the biggest drawbacks of the iPhone 5. The software is not nearly as robust as Google's, which was developed and improved upon over nearly a decade, experts say. The early consensus is that the app is buggy, displays distorted images and provides confusing search results. Apple's version also lacks Google's popular "Street View" feature and does not provide directions over mass transit.
Maps are not the only area where consumers may end up in the crossfire between Apple and its competitors. In a $1 billion settlement last month, Samsung was found to have infringed on six Apple patents--some for what appear to be very simple features like the way apps are laid out or how users zoom in on pictures. Such decisions could mean that consumers only have access to a handful of proprietary features, insiders say. "In the short run, consumers are clearly the losers from the current wars over intellectual property," says David B. Yoffie, Max and Doris Starr Professor of International Business Administration at Harvard University.
Competition tends to be bad for consumers when it creates more high-tech products that are incompatible with each other, experts say. For instance, Apple's iCloud works exclusively with Apple products, while Google's Cloud works with any device using Google's operating system--customers get locked into one or the other, says Ben Bederson, a professor of computer science at the University of Maryland.
Another problem, say tech pros, is that the rush by tech firms to find a one-size-fits-all approach to wildly different smartphones often results in "worse software," adds Mr. Bederson.
Apple did not respond to requests for comment. Google says the company's goal is to make Google Maps available to everyone, "regardless of device, browser or operating system."
Smartphone users may eventually win out, say some experts, with Apple and Google licensing each other's software to make their best features available across several platforms. "In the history of the technology business, it has been common for intense wars over patents to be followed by broad cross-licensing," Mr. Yoffie says.
Apple will likely fine-tune its maps app over the coming months, says Damien Geradin, a competition law partner at Covington & Brussels, a Washington, D.C.-based law firm. Apple dropping Google Maps may be bad for users in the short term, but it will be beneficial over the longer term. "We don't want to be left with only one type of way to find directions: Google Maps."
Write to Quentin Fottrell at quentin.fottrell@dowjones.com
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