Users of iOS devices welcomed the launch of Google’s (NASDAQ:GOOG) standalone maps app this week following its September banishment by Apple (NASDAQ:AAPL). Apple’s homegrown replacement, after all, was panned by users and critics alike and even prompted an apology from company chief executive Tim Cook. But there is more at stake in this maps battle than mere bragging rights for fan love.
Why Are Maps Causing All the Hullabaloo?
While neither Google’s nor Apple’s navigation app includes advertisements, mobile-based location searches are increasingly turning into one of the most lucrative revenue streams, as Market Watch points out. The total U.S. mobile ad market is expected to be worth around $2.7 billion this year, and location searches are quickly becoming coveted data for targeted advertising purposes. The number of smartphone visitors to mapping websites and navigation apps grew 24 percent to 92 million over the last six months, according to comScore.
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“Maps makes up a tiny slice of mobile advertising revenue today, but could be worth well over $1 billion over the next five years,” Opus Research analyst Greg Sterling told Market Watch. And at the moment, Google owns more than 90 percent of location-based searches, according to Sterling. “All indicators point to there being an enormous amount of money at stake over time,” he added. “Today we see most Google Maps queries on Android feature ads. Over time that should equally be true on the iOS version of Google Maps.”
Can Apple Get In There?
While Apple, already working on improving its maps app, is sure to come up with a much better product this time around, some believe its failed first attempt may have doomed its fate. “I see little chance of Apple pushing Google off of the iPhone,” Baird analyst Colin Sebastian said. “Google has a treasure trove of data across platforms and apps, which put them in a unique position to serve personalized ads, something Apple cannot match at this point.”
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