Month: Dec 2017

A few thoughts on Maps, in particular Google Maps and Apple Maps.

Google Maps was not the first digital maps solution nor even the first cloud maps solution. However, they have continuously refined the product adding information that they have gathered using high resolution satellite images, cars that roam the streets, and also local business information that they acquired through either partnering, web scraping, user-generated content and other means. Furthermore, based on the assumption that self-driving cars of the future will rely on maps that vastly more information intensive than the ones that we typically use today, having such high-quality maps is predicted by many to be a huge advantage when such technology becomes mainstream.

There are some problems with this approach though. One is sponsorship. Given that Google generates the vast majority of its revenues though advertising, it is highly probable that they will try to more aggressively monetise Maps in the not-so-distance future. This will most likely be through their integration of local business information, and by preferentially suggesting their sponsors’ businesses to their users, instead of simply listing in order of relevance and proximity. This may negatively impact the user experience in a way that has parallels to how Google has modified their Search results to preferentially show either their own services or sponsored products, relegating the more relevant organic search results to less convenient positions near the bottom of the page. It may also spark anti-trust concerns (and indeed already has) as this activity can be seen as an abuse of their dominant position on Maps to promote their own local business services.

Another is that the assumption that high-resolution maps are essential for autonomous driving will not last forever. If and when autonomous systems become as intelligent as human drivers, then they will no longer need such detail. They should be able to drive themselves based on the abstract and rudimentary maps that human drivers have relied on for decades. Therefore when AI becomes sufficiently sophisticated, these high-resolution maps will become mostly unnecessary and an overkill. The advantage of high-resolution maps will only last while autonomous systems are still much dumber than humans, and after that, their high costs of maintenance will make them more of a liability than an asset.

I point this out because there are apparently some who think that the current superiority of Google Maps compared to say Apple Maps provides an insurmountable moat for the future. While this may be true from a pure data volume and accuracy perspective, one should keep in mind that the disruptions that we have seen in the past decades are often those where the incumbent maintained an advantage in performance or sophistication, but nonetheless lost because the difference no longer mattered.

Two and a half years since its introduction, Apple Watch is seeing increased momentum as market analysts suggest both rising market share and significant growth in sales. Android Wear on the other hand has not been so fortunate with decreased attention from both Google and their hardware partners.

It is one thing to say that Apple has won this first round of the wearables battle. However, it is still very very early in the game. The larger question is what will the landscape look like when wearables reach say 50 percent market penetration, because it is only until then that the winners will become so consolidated, entrenched and seemingly invincible. Before that, markets tend to remain a battle among many where anybody could win the next day.

We know that Apple has continued to refine the Apple Watch. Notable progress has been made in both performance and battery life. Recently, it has become possible to fit LTE connectivity without making the device unmanageably huge. On the marketing and value proposition side, Apple has shifted away from luxury and has moved towards fitness and health. On top of this, they are increasingly using AI to surface relevant information on the small screen, and making small but significant UI tweaks. As a result, we are quickly approaching the point where the value of a wearable would become easy to understand and widely recognised.

On the other hand, Apple still refuses to link the Apple Watch to Android smartphones. The only way to enjoy the Apple Watch remains to own an iPhone. This will create a gap in the market where Android users will increasingly want to own a good smartwatch, but cannot find anything that is compatible with their phone. This gap will only widen in 2018, as the Apple Watch enjoys further success.

OEMs will rush in to fill in this gap. With the lacklustre progress in VR headsets, drones and other gadgets that distracted them for the last couple of years, they will come back to the device that Apple has demonstrated a market exists for. I predict that in at least the later half of 2018, we will see hardware OEMs come back to smartphones.

Google’s attention is a bit more difficult to predict. They are preoccupied with AI and following Amazon’s lead in smart speakers. If so, we might see improved Android Wear hardware, but very little progress in the OS.

From my point of view, it is inevitable that Android users will start to want to have an Apple Watch equivalent. What I’m not sure about is whether their needs will be satisfied by Android Wear or by Samsung’s Tizen, but the fact remains that a significant chunk of the 80% of total smartphone users who don’t have an iPhone, will want a nice smartwatch too.