Apple’s Lost

A new iPhone! A new best phone ever! More revolutionary features! Right? If you are one of the 2 million who ordered a new iPhone 5 within the first 24 hours of its announcement, you hope so. By preordering a phone you haven’t tried, you're depending on the company’s past history of delivering superb design. Unfortunately, Apple’s (Nasdaq: AAPL  ) fallen far from its tree of quality, and the new iPhone represents Apple’s coming of age into just another big tech company.

Blasphemy!
How can I say the newest iPhone isn’t the greatest? One word: maps. Apple, in a bid to break free from Google’s (Nasdaq: GOOG  ) dominance, and further own all aspects of its software experience, chose to ditch Google Maps for its own solution, which features data from TomTom. The maps, unfortunately, pale in comparison to Google’s. For example, the BBC reports "some towns appear to be missing…others are in the wrong location…satellite images of various locations, particularly in Scotland, are obscured by cloud…another screenshot showed a furniture museum that was apparently located in a river." Additionally, Apple has done away with public transit directions, and now points users to third-party applications.

But they’re just maps, right? An iPhone has so much more than maps!

How important maps are in a smartphone
Well, according to Nielsen, Google Maps is the third most popular application used on iPhones, behind Facebook (Nasdaq: FB  ) and iTunes. On Research In Motion’s (Nasdaq: RIMM  ) Blackberry devices, Google Maps is the second most popular. On Android devices, it’s the most popular. And across all smartphones, Google Maps comes in at number two, behind Facebook again.

Maps are very important. And Apple traded the best map solution for its own less-than-stellar application. With does this say about the future of Apple?

Past mistakes versus now
This isn’t Apple’s first error with its iPhones. Back when Steve Jobs was at the helm, the company shipped the iPhone 4 with antenna issues, for which it then offered free bumper cases to help correct the issue. This lapse in quality control is much different than the current issue, however. The antenna issue was hardware based, and Jobs cited that less than 1% of all iPhone 4 owners complained to the company. It’s very possible that in testing, such an issue never came up, and the flaw only appeared after the phone was mass-produced.

The maps issue, however, affects 100% of new iPhones, along with all older iPhones that will be upgraded to the new iOS 6 software. Additionally, the maps software could obviously be tested before shipping, and isn’t an error that only crops up when several million phones are produced. Apple’s bar for quality in design and user experience has been lowered; it's now equal to most other phone manufacturers.

The beginning of a new Apple
It’s impossible to say whether Steve Jobs would have approved the new map application. It’s also impossible to say whether Jobs’ attention to detail is what Apple requires in today’s market. The conclusion that can be drawn, however, is that Apple is turning the corner to operate in favor of securing its market hold instead of delivering the best user experience.

Now, other phone software, like Microsoft’s (Nasdaq: MSFT  ) Windows Phone, has a viable chance to break into a market when previous iPhone owners look for superior mapping. And Android phones, which come closely tied with Google Maps already, will start to look very tempting for the ease of their mapping experience, even if other aspects of the phones aren’t as slick as an iPhone. Customers will begin to compare phones again, instead of defaulting to an iPhone, and if other phone makers can execute, there’s a big opportunity to disrupt iPhone’s market.

Taking a bite out of Apple
The iPhone is only one part of Apple’s revenue stream, and it could capitalize on any number of other products to keep its bull run going. For a more in-depth look at Apple’s opportunities and threats, along with three reasons to buy and sell, grab your copy of our new premium report. If you are more interested in betting against Apple, take a look at our premium report on Microsoft, which covers key developments you must watch in the future.

Fool contributor Dan Newman hopes he can find his way home with his iPhone. He does not hold shares of any of the above companies. Follow him @TMFHelloNewman.

The Motley Fool owns shares of Facebook.
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Read/Post Comments (25) | Recommend This Article (18)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On September 21, 2012, at 7:27 PM, jelp2 wrote:

    It seems Apple is moving in the direction RIM is moving away from. While RIM used to own all of their OS, now they are licensing feature from other software companies while Apple is doing the complete opposite.

  • Report this Comment On September 21, 2012, at 7:48 PM, gmarko wrote:

    Good article and hard to disagree. The remodels of the music app, itunes app, ibooks store, and app store all look awful and the user experience doesn't live up to Apple's high standards. On the app store showing two rows one for paid apps and one for free and having to swipe side to side to browse is terrible. The all grey look in the music app is equally terrible. I've had an iphone from the beginning and could easily navigate the settings. With iOS 6 I found myself lost. We all knew the day would come that Apple would be just another big tech company. I didn't think it would happen this fast. Releasing an unpolished siri last year and an unpolished maps app this year shows Apple has changed. I'm one investor beginning to think the end of this amazing run of growth is fast approaching.

  • Report this Comment On September 21, 2012, at 7:48 PM, quasioc wrote:

    I'm willing to be the author does not have the iPhone 5 or even an iPhone running iOS 6.

    If the author was familiar with the new operating system that Apple launched, he would know you can add Google Maps back to your iPhone in about 5 seconds. Simply go to Google Maps on Safari or whatever browser you use then add it to your home screen.

    I did it earlier today and now I have Google Maps as an app on my phone again. The author did not do his research at all.

  • Report this Comment On September 21, 2012, at 7:49 PM, quasioc wrote:

    *bet

  • Report this Comment On September 21, 2012, at 8:14 PM, gmarko wrote:

    quasioc,

    I think you missed the point. What used to separate Apple from every other tech company was its products just worked and worked from day 1. They were refined and polished before being released. Companies like Microsoft and Google release stuff that isn't fully baked and make adjustments on the fly afterward. The point of Apple being lost is this shift is now evident and conceivably due to the loss of Jobs. They have strayed from what made them great. No doubt Microsoft and Google see an opportunity to take market share from this. Who really cares if you can put an icon for safari based google maps on the iPhone? Is this the user experience you expect from Apple?

  • Report this Comment On September 21, 2012, at 8:30 PM, mypaparon wrote:

    Apple will fix the problem. They always have; always will. I think it's a little too soon for the "doom and gloom" attitude. Just saying.

  • Report this Comment On September 21, 2012, at 8:38 PM, vizzzy wrote:

    Oh! Come on!

    There used to be a time when iphone's call quality, battery life etc. used to suck too. But they fixed it over time. Yes, the current maps is probably a big step backward in the short term. But wait for them to fix it in the next year or so.

    If in 18 months they don't have something comparable then pan them. But it's foo early for doom and gloom as mypaparon said.

  • Report this Comment On September 21, 2012, at 8:55 PM, ezeboog wrote:

    the maps bear argument is overrated. I am no AAPL bull til the end diehard, but the invented concern that aapl maps will be the turning point in Apple becoming a poor quality control company are ridiculous. Maps is simply software and can be updated. Apple has the treasure chest of billions to make sure their software ultimately is top shelf. I would wait for a pullback but Apple's conservative future earnings expectations are still very cheap. Yes, I agree smart money is taking profits these days but when don't they when a stock is trending up? Believe me, the smart money will be buying the next pullback. Why step in front a moving train? Apple's revenues will plateau and then slow someday, yes, but not any time soon.

  • Report this Comment On September 21, 2012, at 9:15 PM, JAXXJAGUAR wrote:

    I just don't think that TMF is pushing their report on Apple enough. Its like, all roads lead to TMF's report on Apple. BTW, this report is stupid. Any body that knows anything about Apple knows that the company will get this issue fixed. They didn't get to the the largest company in the world by taking the easy way out. They will get it fixed.

  • Report this Comment On September 21, 2012, at 9:24 PM, Gbones2692 wrote:

    MAPS !!! That's all u have MAPS !!! What is a blackberry ? When does the Microsoft phone you are talking about go on sale ? How much is it ? .. The fall of apple empire lies on maps ? They are king and will be for a while ..

  • Report this Comment On September 21, 2012, at 10:18 PM, gmarko wrote:

    Interesting comments but I'm skeptical that Apple can fix the maps app. Yes, they have tons of money to throw at any problem but the track record is mixed. iMessage and iCloud continue to be plagued with problems. Mobileme didn't work either which Jobs even admitted as much. Maps has been in the works for more than 3 years. Ping has been a flop and is about to be put out to pasture. Siri was better as an app before Apple bought the company. The hardware is top notch with the design and build materials unrivaled. Ultimately it's going to be the software that matters as there is only so much to do with the form factor and design. I despise Google because of Android but their platform is ahead in some ways. iPhone accounts for 60% of Apple's revenue....misses like maps could be all it takes to see a plateau or decline in revenue.

  • Report this Comment On September 21, 2012, at 10:39 PM, Morgana wrote:

    Seriously???!?!?!?!?!?!?!????

  • Report this Comment On September 21, 2012, at 11:08 PM, TMFHelloNewman wrote:

    Thanks for reading all. I actually did upgrade my iPhone right away to iOS6, which inspired me to write this article.

    The mapping, as widely reported, is not the greatest. I did add the Google Maps from Safari, and it is a slower, clunkier solution. In the article, I didn't even mention the issues I had with the Passbook app - which apparently just takes you to the app store to download other apps. And there are issues with certain websites. For one, the Google Music app, that is just a shell over Safari, fails to play any music now.

    It's, of course, difficult to tell just when a company jumps the shark. Netflix botched Qwikster. Coke had New Coke. HP had the Touchpad. All have seemingly recovered to different extents. Apple will probably fix the maps, Google will release its own map app that will probably be more popular, and people will still buy iPhones. But not with the reckless abandon they once bought them with.

  • Report this Comment On September 22, 2012, at 8:45 AM, lucasmonger wrote:

    Am I the only person who actually likes the new Maps app. Vector graphics gives you lightning speed to zoom way to the street and zoom way out to the entire US. Try that side by side with Google Maps and the Apple wins hands down. Sure the turn by turn needs work, but I'm betting they're crowdsourcing the data when people deviate from a given direction to make the algorithm better. That's something that a Garmin cannot do.

  • Report this Comment On September 23, 2012, at 3:32 AM, Melci wrote:

    Dan Newman, how foolish can one be.

    Saying one app on iOS which needs a bit of work is worse than a hardware problem. Are you on crack? Don't you understand how much easier it is to update a piece of software vs fix hardware after it has left the manufacturer?

    Also, any percieved problems with Apple's maps app des not affect 100% of users as I and many others have been using the maps app for days or weeks and have had no problems at all. In fact it is far improved over the old which had no turn-by-turn navigation or 3D flyover or Yelp integration.

    More importantly, there are hundreds of other GPS and navigation apps to choose from for iOS and Google will be releasing their own native Google Maps app sooner or later anyway,

    Storm in a tea cup generated by those haters who always try to find some perceived flaw in Apple's products and blow it out of all proportion.

    Remember when the lack of a keyboard doomed the iPhone and thus Apple, or the imaginary "heat problem" with the iPad or the imaginary "suicide cluster" at Foxconn (if Foxconn had the same suicide rate as the rest of China they'd have had 1,320 suicides over 5 years, not 17 (!!!) out of their 1.2 million workers.)

  • Report this Comment On September 23, 2012, at 6:01 AM, SuntanIronMan wrote:

    @quasioc

    Yes, you can use the Safari version of Google Maps, but it is now Apple's map data is now used for the iOS MapKit API.

    For example, my Nike+ Running app now uses the Apple-powered Maps, when it previously always used the Google-powered Maps. Or apps with location finders now use the Apple-powered Maps.

    Yes, you can still use Google Maps in Safari. It just isn't as convenient to use as it once was when Google's map data was integrated into everything.

  • Report this Comment On September 23, 2012, at 6:02 AM, SuntanIronMan wrote:

    *Yes, you can use the Safari version of Google Maps, but it is now Apple's map data that is used for the iOS MapKit API.

  • Report this Comment On September 23, 2012, at 3:53 PM, TMFHelloNewman wrote:

    @Melci

    Actually I'm don't use crack, but straight up opium. Apple demonstrated how easy it was to fix a hardware issue with the bumpers for Antennagate. "Apollo 11" also shows how some ingenious thinking and duct tape can make a damaged tin can make it back to Earth. Obviously there are degrees to issues, and this software one is big.

    Developing the usual Apple-level quality of software takes time. Developing quality map software takes even more time and data. Google Maps has been out for 7 years. It won't take that long to make something comparable, but it isn't a simple overnight coding session. Turn-by-turn navigation doesn't matter when it navigates you into an ocean, and I found it just as easy to get Yelp reviews on the Yelp app.

    The fact that Apple now will rely on the hundreds of other GPS and navigation apps proves my point exactly - users will have to adopt other solutions than those built in that made Apple easy, intuitive, and embraced by consumers.

  • Report this Comment On September 23, 2012, at 4:15 PM, fitness14 wrote:

    I know it's time to buy more Apple when they have become truly hated by fanboys of Android or short sellers. It takes greatness to arouse such narrow minded rhetoric. Latching on to a subpar app as a company jumping the shark is pretty thin considering their pre-orders, general popularity, and their profitability as a company. Have any of their competitors ever released something that needed work? We could probably dig up a few examples. I think the earnings will continue to move the needle over time. I am not interested in 5-7 years from now. The next 2 look rosy....then time will tell.

  • Report this Comment On September 23, 2012, at 4:36 PM, Mega wrote:

    The iPhone has always had weak navigation compared to Android. (Google Maps on iPhone was nowhere near as good as on Android.) Now that they finally have a plan to do something about it, people are all upset.

  • Report this Comment On September 23, 2012, at 5:38 PM, bluedepth wrote:

    @gmarko

    I keep reading the same theme that you reiterate here; that under Steve Jobs Apple never stumbled, and its products always shipped with the highest level of polish.

    However, if you go back you can see that was not always the case. MobileMe is a primary example, plus the antenna problem and subsequent "free-case" public apology. Ping was launched under Jobs, and floundered. The earlier highest-end Macbook Pro 17" had graphics cards which completely failed. There are other examples.

    Apple has often come out with products which had glitches, with both hardware and software. The only question now is how these problems will be addressed, and whether they will increase in severity or regularity.

    Steve reportedly called the entire MobileMe team into a meeting, berated them and then publicly sacked the project lead. Tim Cooke will likely take a more measured approach, but I expect that Apple will throw considerable resources over the next several weeks to "fix" the Maps app.

  • Report this Comment On September 23, 2012, at 9:10 PM, gmarko wrote:

    @bluedepth

    Yes, you are correct that Apple had some misses under Jobs. Antenna gate was blown way out of proportion but Jobs handled it beautifully.

    I think the difference between Maps and Mobileme or Ping is how often people use Maps compared Mobileme or Ping both of which I never used. Having a high quality maps app is critical to compete against Android. I don't fault Apple for making the change; a decision made years ago under Jobs. We know Apple made its first map company acquisition back in 2009. With all the resources at their disposal and spending 3 full years developing it one has to question whether Apple can improve it.

    There are other user interface choices made in iOS 6 that are just down right awful. Music app and app store being my two biggest complaints. Minor glitches can always be fixed. The fact that these two awful user interface designs didn't get rejected is more worrisome.

  • Report this Comment On September 28, 2012, at 9:25 AM, Darwood11 wrote:

    When I read articles such as this, and the comments, it is somewhat reminiscent of the bursting of the tech bubble, the real estate bubble and the banking sector implosion.

    Some people pointed out problems at those times and a lot of others argued vehemently against those cautions. As it turned out, most of those arguing that "there is not problem" and "everything is fine" were compromised by their personal involvements and in many cases were profiting from those situations.

    I suspect that is true today, and there appears to be a lot of investors counting on really stellar performance from their AAPL stock. Investing is, however, a place where it has been well demonstrated that one is more likely to make good decisions if they leave their emotions at the door.

    AAPL is a tech company in a crowded sector with many competitors. Some are beginning to get too close, as I suggest was manifested in the recent patent infringement cases.

    One has a choicevto make, and I would hope all readers weigh the factors and make a rational decision.

    I find the vast majority of Fool articles to be very helpful to me in making my investing decisions, and ditto for the paid services. My net worth is a reflection of that.

  • Report this Comment On September 28, 2012, at 1:28 PM, jedited1 wrote:

    The one thing that everyone is missing is and always has been Apple's BIGGEST fault.

    They are the definition of CONTROL freaks and they have ALWAYS been what they claimed the WinTel community was in Apple's "1984" Superbowl ad.

    Apple had some GREAT 3rd party apps, but that wasn't good enough for Apple, they HAVE to control EVERYTHING.

    Their control issues was their downfall before (and Steve Jobs was the BIGGEST supporter of that) and it will be their downfall this time.

  • Report this Comment On September 28, 2012, at 4:42 PM, JCoeur100 wrote:

    Apple has made big goofs before and rebounded to thrive. I'd be more worried about the cloud security issues and ease-of-use difficulties that are creeping in. There are other map apps out there that run well on the iPad and people who need them will find them.

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