Author(s): Peter Bryer
The technology market saw a kind of digital land rush in 2007. The growing importance of location-based services and navigation caused a bidding war for Navteq and Tele Atlas, the leading providers of digital maps at the time. Supply was limited, and demand was high. When the dust settled, TomTom acquired Tele Atlas and Nokia bought Navteq.
Building a large-scale database of digital maps is a complex, expensive and tedious task that requires a high degree of expertise and a long-term commitment. The barriers to entry are high, and this combined with a spotty return on investments explains the extremely limited supply. There are now three major commercial solutions, since Google has established itself as a mapping leader alongside Nokia and TomTom. There's also the influential, crowd-sourced OpenStreetMap project, and several local solutions such as China's AutoNavi (now owned by Alibaba).
Sightings of mystery Apple vans on the US coasts led to speculation that Apple would enter this business as well. TomTom currently supplies map data to the company, but Apple's independent streak and long reach were hints that it would want to control this content.
Apple has now confirmed that it has map vehicles driving around Ireland, the UK and the US, collecting location information in selected metropolitan areas and suburban neighbourhoods. It's a significant development for the digital mapping segment.
The importance of digital maps to the company has long been clear, and CCS Insight has speculated several times that Apple might look to acquire TomTom for its digital maps unit, Tele Atlas, and work out from there (see Daily Insight: Is Apple Looking in the Wrong Places?). Starting from scratch is an arduous task, but it appears that's what Apple will do. However, the company extended its contract with TomTom last month, so will continue to use sourced maps for some time to come.
Apple is starting its journey in selected areas across three countries. Vehicles collect location data, points of interest, Wi-Fi MAC addresses (for positioning) and street-level images of surroundings. Covering large parts of the world like this will require many person-years of work, but the company has the resources and justification.
Apple could be working to complement its supplier's maps, but the opportunities point to a serious interest in building and maintaining a database of digital maps on a large scale. Many current key trends rely on high-quality location data, including on-device location services, self-driving cars, augmented and virtual reality, local advertising and wearables. It could take Apple several years to gather information on a wide scale, but these trending tech topics are also some way from true fruition.
Mapping competitors may view this as a positive development that highlights the vital importance of maps and related data and services. Map apps have become among the most often-used applications — they were seen as an important control point a decade ago, but much of the potential is only now being realised. Device makers, auto manufacturers, car services and marketers have a vital interest here.
Apple's broad base of active users and developers puts it in a powerful position to collect data from the crowd (live traffic stats, for example) and to entice developers to embed location into more apps. Following past location-related issues, Apple is working to make this a world-class solution out of the gate, leapfrogging competitors with a fresh approach. The company has received several map-related patents in recent years, covering things like interactive 3D views and landmark-based turn-by-turn navigation. There's a great deal of groundwork already in place.