According to TechCrunch, Apple (NASDAQ:AAPL) is reportedly in advanced talks to buy social mapping company Waze for around $500 million. This is move would validate that Apple is still very interested in improving its Map app, and its desire to dethrone Google's (NASDAQ:GOOGL) No. 1 spot in the free app store still exists. Given how Waze already provides Apple with map data, this deal is a natural fit. For Apple, the added bonus is Waze's international reach, which is much greater than what a Foursquare deal would do.
Waze differentiates itself by using location-based data of moving cars instead of fixed locations. It also allows user input to help improve real-time traffic conditions. The power of Waze lies in the network and its community adoption rate. The more users of Waze, the better it becomes. As of September, Waze had 26 million users worldwide. During the height of the Maps drama, Waze became the leading mapping application to gain meaningful share, which to me means that even more Wazers came on board. According to Onavo, Waze increased its U.S. market share by 3% to a total of 10% as a result of the fiasco.
Here's looking at you, Google
When the Maps fiasco hit, we learned how crucial a great mapping application is to a smartphone ecosystem. If Maps was the application when the first iPhone was released back in 2007, things may have turned out differently for Team Cupertino. Regardless of that outcome, it's hard to argue against Google Maps having a hand in creating a successfully grounded ecosystem for Apple.
Mircosoft (NASDAQ:MSFT) is on its own when it comes to Google support. A Google App project manager went on record saying how Google has no plans to develop for any of Microsoft's "8" branded platforms until users show up, which in his mind has yet to happen. We're about to learn firsthand if an ecosystem without Google has the ability to gain significant market share. Given Microsoft's 2.6% mobile market share, this experiment has a lot riding on it.
A deal between Apple and Waze may be far off until there's an agreement on price. Apple wants to pay no more than $500 million with incentives, and Waze wants $750 million. When and if these parties can reach an agreement, it will show Apple's willingness for relentless improvement. It's a vote of confidence that Apple will (eventually) take measures to fix any problems with its products or services. Remember, Apple didn't get into its position of power by sweeping problems under the rug.
Fool contributor Steve Heller owns shares of Google and Apple. The Motley Fool owns shares of Apple, Google, and Microsoft. Motley Fool newsletter services recommend Apple, Google, and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.