Pinpointing Apple’s Wrong Turn on Maps

People tend to forget how crummy the original iPhone was when it hit the shelves of Apple stores across the country in 2007. By today's standards, the device was essentially a functionless piece of pocket art. It weighed 20% more than the current iPhone, offered one-quarter of the memory, and delivered a measly 2 megapixel camera that could only capture still images. And if that wasn't enough, there was one more striking characteristic of the original iPhone; no App Store. All the applications on the original iPhone came preloaded with the device. Developers weren't able to offer 3rd party apps to users until the release of iOS 2.0 and the iPhone 3G.

So here's the question: If Apple could get away with the release of a product with such striking shortcomings then, why isn't it working for them now with their release of Apple Maps?

Potential explanations abound. Maybe Maps' shortcomings are just too egregious this time. Maybe the quality assurance process misses Steve Jobs' guiding hand. Maybe fans have come to expect perfection from Apple. We, however, propose a different answer — one that explains why Apple was afforded such leniency in the past, and why their present battle in mapping might be long, expensive and difficult to win. Namely, for the first time in a long while, Apple is pursuing a sustaining innovation fight against a well established incumbent: Google.

Consider Apple's string of big wins — the iPod, iPhone, the iPad. What do they all have in common? Other than that catchy little "i" and beautiful design, they happen to all be disruptive. Or in simpler terms, they were the types of innovations that reject the existing basis of competition in an industry. Despite tending to underperform their upmarket competitors, disruptive innovations tend to make complex, expensive technology cheaper or more accessible to customers (think PCs vs. Minicomputers or Salesforce.com vs. Oracle). For example, compared to traditional laptop computers, the iPad is terribly deficient. It doesn't run useful programs like Office, is painfully slow, and is near impossible to type on. But the iPad has also made computing available to anyone on the go. For the casual traveler, the thought of carrying a personal (not business) computer through airports simply to access movies and music was prohibitive. The devices were expensive, heavy, and simply offered more computing power than consumers needed. However, with the iPad's entry onto the scene, these previously "over-served" customers readily adopted tablet computing as their portal to entertainment on the go. Even with its high price tag, the iPad was a cheaper, more accessible alternative to traditional laptops. For that reason, users were willing to forgo some of their traditional computing demands — like the need to run Excel and work in two windows at once.

Underperforming certain traditional expectations is simply a staple of disruption. Fortunately for Apple, so is being forgiven for early hiccups.

Maps is an entirely different story. Maps was targeted not to make a complex technology cheaper or more accessible — it was released to wean Apple off their reliance on Google. They are fighting a battle directly with an incumbent, trying to offer new and improved features, such as 3D rendering and voice integration with Siri. But this sort of battle, which we call sustaining innovation, will create two sorts of problems for Apple. The first is that the incumbent (Google) not only has a head start but also maintains a powerful incentive to roll out improvements that replicate the features offered by new entrants (Apple). Though Google has had voice integration and 3D mapping for some time (available only on Android devices), if Apple actually deployed an incredible new feature, Google would copy it in no time.

But worse for Apple, because this time they haven't redefined a category entirely, customer expectations are being shaped by Google's past performance. In particular, iPhone users are demanding the same level of accuracy and reliability offered by the company whose explicit mission is to categorize the worlds' data (maps included!). In short, Apple Maps performs more poorly than the existing product without making up for it with better affordability, accessibility or ease of use. As a result, customers have been unforgiving.

The outlook for Apple Maps is grim. Given its outstanding investment in mapping technology and the significant stake in advertising revenue, Google is unlikely to cede its turf in mapping easily. And Google has every reason to draw out the battle — better mapping functionality will help Google's Android system vie for market share gains against Apple's iOS.

Though Apple might eventually overcome this stumble and produce a superior mapping technology, it won't be a fun adventure. It will require millions (if not billions) of dollars and will take years. This is a lot of bad news for any Apple investors who saw Maps as a path to advertising revenue, or for Apple fans who expected Maps to change their lives.

Apple might house the world's most seasoned innovators, but at the end of the day, it's hard to compete against good business theory. It's just plain difficult to fight a sustaining innovation battle against an incumbent. If Tim Cook wants to keep his job for the foreseeable future, he should take a lesson from the Steve Jobs's playbook and stick to disrupting industries, instead of fighting behemoths head-on.

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