Post by davidcv100 on Oct 1, 2012 16:24:59 GMT -8
Tech Trader Daily blogs.barrons.com/techtraderdaily/2012/10/01/apple-maps-could-be-canary-in-coal-mine-says-town-hall/
October 1, 2012, 7:40 P.M. ET
Apple: Maps Could Be Canary in Coal Mine, Says Town Hall
By Tiernan Ray
Jamie Townsend of boutique research firm TownHall Research this afternoon opines that Apple‘s (AAPL) problem with its new mapping application in the iOS operating system may, indeed, be the canary in the coal mine that some have suggested over the last two weeks.
In case you’ve missed the whole episode, Apple two weeks ago updated iOS with version six for its iPhone, iPad, and iPod Touch. Apple dumped the old Maps programs based on Google‘s (GOOG) map data and replaced it with a new program built by Apple using other data. The new version was substantially derided for errors in the data as well as some dissatisfaction with the 3D renderings and satellite imagery.
There was a pile on, with pundits such as The New York Times’s Joe Nocera suggesting Apple is losing its edge without late founder and CEO Steve Jobs. Some picked up on that theme to warn about the stock, such as Seabreeze Partners’s Doug Kass, a week ago.
Others dismissed that notion. (See my commentary a week ago and the interview last Wednesday with early Apple backer Dick Kramlich.)
Last Friday, Apple CEO Tim Cook apologized for flaws in Maps and promised to do better.
Today, Townsend takes something like the Nocera/Kass point of view, but more broadly posits that Apple faces mounting challenges. He is sticking with a Buy rating on Apple shares, and doesn’t believe it’s time to “jump ship,” but rather argues that there is increased risk for Apple:
The embarrassment of Apple’s failed new maps effort is unlikely to derail the mobile juggernaut that has been trampling competitors for the last five years. At the same time, we believe that the momentum for Apple is increasingly at risk over the next twelve months. Smartphone penetration is growing, Samsung is still firing strong smartphone and tablet salvos, and other lesser vendors are narrowing the perception gap. Perhaps, most importantly, Apple’s ability to stay ahead of the competition seems to be increasingly at risk of becoming more of a catch-up game (4G as one example). For now, we will focus on the importance of the maps mishap and location in general, but we are also keeping a close eye on the ability of Apple to sustain its momentum through 2013.
To those who say that problems with Apple’s Maps are less serious than the controversy over antenna design on the iPhone 4 in 2010 (under Jobs’s leadership), Townsend argues the opposite, postulating that accurate geolocation data is a bad place for Apple to fumble.
He further extrapolates that Apple is fumbling the future on a number of fronts:
Analyzing the competitive environments of location markets recently, ABI Research had to triple-check rankings. Apple consistently scores much lower than Google or Nokia (NOK)/Microsoft (MSFT). On alternative location technologies, Apple was the first to take a chance on Skyhook Wireless, yet it stopped there. There is little sign that Apple plans to support newer, more accurate technologies concerning the likes of the indoor space, where again Apple belligerently shows neither signs of innovation nor a willingness to support Wi-Fi- based start-ups. Granted, GPS IC vendors will fill many of the raw, ubiquitous location gaps here, but there is so much more to location today than just identifying the location of a device. More worrying is how Apple is failing to develop an ecosystem in which location-based advertising can thrive. Fundamentally, it does not have its own search engine (Safari uses Google); its map/PoI offering is now weaker than when ABI Research completed it location analysis earlier this year. Apple’s advertising business has yet to take off. It has no real social presence, no mobile payment solution (although Passbook is a step in the right direction). Apple has already badly burned itself on privacy and location data aggregation. When combined, these services will drive the analytics engines that will facilitate the next big battleground – hyper- local mobile search and advertising.
Apple shares today closed down $7.71, or 1.2%, at $659.39.
October 1, 2012, 7:40 P.M. ET
Apple: Maps Could Be Canary in Coal Mine, Says Town Hall
By Tiernan Ray
Jamie Townsend of boutique research firm TownHall Research this afternoon opines that Apple‘s (AAPL) problem with its new mapping application in the iOS operating system may, indeed, be the canary in the coal mine that some have suggested over the last two weeks.
In case you’ve missed the whole episode, Apple two weeks ago updated iOS with version six for its iPhone, iPad, and iPod Touch. Apple dumped the old Maps programs based on Google‘s (GOOG) map data and replaced it with a new program built by Apple using other data. The new version was substantially derided for errors in the data as well as some dissatisfaction with the 3D renderings and satellite imagery.
There was a pile on, with pundits such as The New York Times’s Joe Nocera suggesting Apple is losing its edge without late founder and CEO Steve Jobs. Some picked up on that theme to warn about the stock, such as Seabreeze Partners’s Doug Kass, a week ago.
Others dismissed that notion. (See my commentary a week ago and the interview last Wednesday with early Apple backer Dick Kramlich.)
Last Friday, Apple CEO Tim Cook apologized for flaws in Maps and promised to do better.
Today, Townsend takes something like the Nocera/Kass point of view, but more broadly posits that Apple faces mounting challenges. He is sticking with a Buy rating on Apple shares, and doesn’t believe it’s time to “jump ship,” but rather argues that there is increased risk for Apple:
The embarrassment of Apple’s failed new maps effort is unlikely to derail the mobile juggernaut that has been trampling competitors for the last five years. At the same time, we believe that the momentum for Apple is increasingly at risk over the next twelve months. Smartphone penetration is growing, Samsung is still firing strong smartphone and tablet salvos, and other lesser vendors are narrowing the perception gap. Perhaps, most importantly, Apple’s ability to stay ahead of the competition seems to be increasingly at risk of becoming more of a catch-up game (4G as one example). For now, we will focus on the importance of the maps mishap and location in general, but we are also keeping a close eye on the ability of Apple to sustain its momentum through 2013.
To those who say that problems with Apple’s Maps are less serious than the controversy over antenna design on the iPhone 4 in 2010 (under Jobs’s leadership), Townsend argues the opposite, postulating that accurate geolocation data is a bad place for Apple to fumble.
He further extrapolates that Apple is fumbling the future on a number of fronts:
Analyzing the competitive environments of location markets recently, ABI Research had to triple-check rankings. Apple consistently scores much lower than Google or Nokia (NOK)/Microsoft (MSFT). On alternative location technologies, Apple was the first to take a chance on Skyhook Wireless, yet it stopped there. There is little sign that Apple plans to support newer, more accurate technologies concerning the likes of the indoor space, where again Apple belligerently shows neither signs of innovation nor a willingness to support Wi-Fi- based start-ups. Granted, GPS IC vendors will fill many of the raw, ubiquitous location gaps here, but there is so much more to location today than just identifying the location of a device. More worrying is how Apple is failing to develop an ecosystem in which location-based advertising can thrive. Fundamentally, it does not have its own search engine (Safari uses Google); its map/PoI offering is now weaker than when ABI Research completed it location analysis earlier this year. Apple’s advertising business has yet to take off. It has no real social presence, no mobile payment solution (although Passbook is a step in the right direction). Apple has already badly burned itself on privacy and location data aggregation. When combined, these services will drive the analytics engines that will facilitate the next big battleground – hyper- local mobile search and advertising.
Apple shares today closed down $7.71, or 1.2%, at $659.39.