A shot was just fired in a war between several technology giants. Is it an artificial intelligence (AI) skirmish? Nope. In this case, it's a map war. On Wednesday, the Overture Maps Foundation announced the release of an open map dataset that includes data on more than 59 million places across the world.
That might not seem overly momentous at first glance. But the real story is that Meta Platforms (META +6.49%), Microsoft (MSFT +0.48%), and Amazon (AMZN +3.42%) appear to be teaming up to try to take down Apple (AAPL +2.13%) and Alphabet (GOOG +3.56%) (GOOGL +3.71%) in a key segment. Here's what investors should know.
Image source: Getty Images.
A lucrative duopoly
Alphabet's Google Maps currently enjoys a market share of around 80% in the mobile maps market. That's not quite monopoly status, but it's close.
The mobile maps market is better described as a duopoly. Apple Maps claims a market share of between 10% and 12%. That doesn't leave much of the market to all of the other competitors.
Neither Alphabet nor Apple discloses exactly how much money they make from their respective map products, however, Morgan Stanley reportedly estimates that Google Maps' mobile version will rake in over $9.8 billion this year. Adding the desktop version brings the total estimated haul to more than $11 billion.
Apple Maps undoubtedly generates significantly less revenue, but the company has placed a huge bet on the app with the expectations of a positive return on investment. In 2019, Apple revealed in a response to the U.S. House of Representatives Judiciary Committee that it had "invested billions of dollars in Apple Maps."
Ready to rumble
Meta, Microsoft, and Amazon apparently decided that they weren't happy with the Google-Apple duopoly in maps. In December 2022, the three companies joined forces, along with GPS maker TomTom, to work with the Linux Foundation to form the Overture Maps Foundation.
Overture's goal is to build reliable map data that can be used under an open data license. The organization isn't creating maps itself, though. Instead, it wants to give software developers the data they need to build their own maps.
The three founding giants of Overture aren't working together merely to rain on Google's and Apple's parade, though. They have their own interests in mind as well.
Meta's underlying motivation seems to be spurring the development of the metaverse. Map data should help developers create "digital twins" of the real world that exist in the virtual universe that's an important vision for Meta CEO Mark Zuckerberg.
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Key Data Points
Microsoft appears to have an AI angle. Russell Dicker, Microsoft's corporate vice president of products, maps, and local, said in a press release announcing Overture's formation that "current and next-generation map products require open map data built using AI that's reliable, easy-to-use, and interoperable."
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Key Data Points
Amazon knows that many customers who use its Amazon Web Services (AWS) cloud platform use maps extensively. Open map data could spark more development of applications that incorporate maps -- and run on AWS.
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Key Data Points
Investing implications
Investors' reaction to the latest development in the map war was basically a yawn. Alphabet stock jumped and Microsoft stock fell after their respective second-quarter updates. Shares of Apple and Meta rose modestly, while Amazon stock slipped a little. None of these moves appeared to be related to Overture's announcement.
It's possible that Alphabet and Apple could feel some pain if a large number of developers switch from using their maps to building their own maps using Overture's data. However, the two companies probably aren't too worried at this point.
For many developers, using Google Maps and Apple Maps is convenient and accomplishes their goals. They could be less inclined to expend the effort to build their own maps even with detailed and reliable data available from Overture.
The map war between Meta, Microsoft, and Amazon vs. Google and Apple might become more heated, but for now, AI appears to be a much more significant battleground.
