Did Google screw up by not giving Apple the concessions it wanted to keep Google Maps as the default Maps application on iOS? originally appeared on Quora - the place to gain and share knowledge, empowering people to learn from others and better understand the world.
Answer by Michael Vogel, Certified Apple Mac Technician 2008 - Present, on Quora:
Did Google screw up by not giving Apple the concessions it wanted to keep Google Maps as the default Maps application on iOS?
In retrospect, it is clear that they did.
While the negotiations themselves are still a closely guarded secret, it appears that Google wanted more information from Apple regarding the users of Google Maps on the iPhone. Their contract with Apple only allowed Google to collect minimal data and that made delivering targeted ads difficult. As a result, certain features that were widely available on Android and other mapping apps like Waze for iOS, such as turn by turn directions and live updating, did not work on Google Maps. It was a stand-off where Google was holding back features and Apple was holding back user data.
As we well know, rather than renewing their contract with Google, Apple pulled Google Maps (and YouTube) from iOS stock apps and replaced it with their own Apple Maps app. The rocky launch drove Google Maps for iOS (now with updated features) to the top of the App Store downloads chart and had Apple publicly apologizing. To this day, tech blogs and news publications refer to Apple Maps with derision and dismiss it as an inferior option.
However, over the years, Apple Maps has improved to be on par with alternatives and even offers some features that are unavailable to third party apps. Being the default option, being fully integrated into Siri, and having the ability to see directions on the lock screen make it easy to catch new iOS users and even Google Maps loyalists. A year after Apple released Maps, in spite of their problems, more than 23 million users had switched to Apple Maps from Google Maps. Currently, around three out of four iOS users use Apple Maps over Google Maps. [1]
Apple Maps “failure” leads to 37% market share gain within a year.
The question, however, is how much money Google actually lost from those lost users. Without the data they were trying to get from Apple, it’s doubtful they would have the revenue they wanted from iOS. It’s possible that 25% of the iOS Google Maps users in 2016 are worth more than 100% of the users in 2012. However if Google had remained the default provider, more users would be available in 2016 and even with reduced ad revenue from Apple, Google would have lost money.
Google’s actions in negotiating with Apple post-2012 are very telling. Google continues to pay Apple over $1 billion a year to maintain their status as the default search engine and not only do they no longer cripple iOS versions of their apps, they often have more features and run better than on Android. In spite of Android’s growing market share, iOS users are still vastly more valuable than Android users when it comes to ad revenue, with a single iOS user being anywhere from 4–8 times more valuable than an Android user, depending location. As a result, Google has been more willing to work with Apple to their mutual benefit and they are certainly willing to pull in the billions of dollars in ad revenue from iOS ($8.85 billion and 75% of mobile ad revenue for 2015 came from iOS [2] ).
Given what Google lost and from their behavior in the aftermath, I would say that they did make a mistake and one that they are unlikely to repeat. Apple holds an enviable position of holding the majority of the high end smartphone market and that is where the money is.
Yuval Ariav makes a fantastic point that no matter what concessions Google provided, Apple might have developed their own mapping application, but I don’t completely agree. If Apple was able to get everything they wanted from Google, I think there is a strong case for them continuing to use Google Maps on iOS. Apple gets no direct revenue from Maps for iOS. However, continuity and the shift to native apps may have driven them in that direction further down the road. The question remains if Apple’s shift to making all of their stock apps in-house happened as a result of the problems with Google or if the problems with Google were a result of that shift. The native Weather app didn’t switch from Yahoo! until 2014 and even now it uses The Weather Channel for their data. The Stocks app is still provided by Yahoo! as well, but these apps are much less popular and essential to the smartphone experience than Maps.
Footnotes
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