Bloomberg News

Apple CEO ‘Extremely Sorry’ for IPhone Maps Frustration

September 29, 2012

Apple CEO Tim Cook ‘Extremely Sorry’ for IPhone Maps Frustration

The new Apple Inc. Maps app icon is seen on an Apple Inc. iPhone 5 in this arranged photograph in London. Photographer: Simon Dawson/Bloomberg

Apple Inc. (AAPL:US) Chief Executive Officer Tim Cook apologized for the iPhone mapping software released last week that has been criticized for flaws such as misrouted directions and inaccurately located landmarks.

“We are extremely sorry for the frustration this has caused our customers and we are doing everything we can to make Maps better,” Cook said in a letter to customers posted today on the Cupertino, California-based company’s website.

Apple’s decision to build its navigation application reflects a widening rift with Google Inc. (GOOG:US), which had provided its Google Maps program since the iPhone debuted in 2007. While the new software adds features such as turn-by-turn navigation, it is widely faulted for unreliable landmark searches, routes that get users lost and a lack of public transit directions.

“An apology is never bad,” Carl Howe, an analyst at Yankee Group in Boston, said in an interview. “But notice they didn’t say that they are going to reinstate Google Maps. There is no impact, there is no change in philosophy or direction.”

Apple’s mapping application was released as part of the new iOS 6 software, which runs the iPhone, iPad and iPod Touch. Cook said that the feature will improve as the company collects more data. In the meantime, he said people who are frustrated with the experience could download mapping applications such as Microsoft Corp.’s Bing, Waze and MapQuest from the company’s App Store. He said customers also could use the iPhone’s Internet browser to use Google’s mapping application.

‘Their Call’

Google Chairman Eric Schmidt said on Sept. 25 that Apple should have stuck with Google Maps. “It would have been better if they had kept ours,” Schmidt said at a press event in Tokyo. “What were we going to do, force them not to change their mind? It’s their call.”

Nate Tyler, a spokesman for Google, declined to comment beyond an online post explaining how to access its maps through the iPhone Web browser. The company hasn’t submitted a mapping app to Apple for the approval needed for it to appear in the App Store, a person familiar with the matter said on Sept. 25.

Google has been building out its online mapping software since 2005, using cars and satellites to accumulate data that helps improve its accuracy and reliability. To catch up, Apple can use location data collected from customers using its maps to improve the service. Apple’s map software includes a feedback feature for users to report inaccurate directions and other bugs.

‘Fell Short’

“At Apple, we strive to make world-class products that deliver the best experience possible to our customers,” Cook said. “With the launch of our new Maps last week, we fell short on this commitment.”

In the past few years, Apple has acquired (AAPL:US) small mapping companies including C3 Technologies, Poly9 and Placebase. The location information that Apple licenses from TomTom NV (TOM2) and OpenStreetMap isn’t as good as Google, said Noam Bardin, the CEO of Waze Inc., which makes an iPhone mapping app.

“The big problem is they’re 100 percent hostage to the quality of their data -- Apple is stuck,” Bardin said. While the quality will improve, it will be very expensive to match the billions Google has already spent on maps, he said. “The tactical challenge is they bit off what Google does really well and tried to do it themselves.”

Record Sales

Apple had to have known the application had problems during the testing period and decided to move ahead nonetheless, Bardin said.

The mapping fiasco is a product of Apple’s growing rivalry with Google, the maker of the world’s most popular smartphone software. Google’s Android operating system runs on devices from manufacturers including Samsung Electronics Co. and HTC Corp. (2498) that compete with the iPhone.

Apple built the replacement app because it wanted to scale back its relationship with Google, not because of any glaring product flaws, two people familiar with Apple’s development of the mapping features said last week.

The feud also extends beyond maps. For the first time since 2007, Google’s YouTube video service isn’t preinstalled on the new iPhone. Schmidt exited Apple’s board of directors in 2009 as tensions escalated between the competitors.

Apple took a strategic risk releasing its own maps app before it was ready, said Barbara Kahn, a marketing professor at the Wharton School at the University of Pennsylvania.

‘Competitor’s Brand’

“Maps is a very critical Google brand,” Kahn said in an interview. “Apple doesn’t want their competitor’s brand all over their phone.”

That said, defects with the maps isn’t likely to crimp sales of the iPhone 5, said Gene Munster, an analyst at Piper Jaffray Cos. Apple sold a record 5 million iPhone 5s during the handset’s debut weekend. The device, which has a bigger screen and is lighter than previous models, went on sale in another 22 countries today and will be in 100 by the end of the year.

“Consumer sentiment on the iPhone remains high,” Munster wrote in a research note today. “The maps product is not causing a user backlash.”

The maps software joins a list of other faulty services Apple has introduced in recent years. It recently discontinued the Ping music social network after it failed to attract users. MobileMe, a product for e-mail, calender and other online services, was also plagued by defects and recently transitioned into Apple’s iCloud service.

Prior Apologies

This is also the third time Apple has had to apologize or reverse course during the introduction of a new iPhone.

Following the first iPhone release in 2007, Apple co- founder Steve Jobs offered users rebates and an apology because early customers complained about a price cut two months after it went on sale.

In 2010, Jobs apologized and gave out free cases to customers because of antenna defects for the iPhone 4. After Consumer Reports and other publications showed the device would lose its signal if held a certain way, Jobs called a rare press conference to explain the issue.

The mapping application has made the company a target of ridicule. A website was created to chronicle various snafus, including one where a huge swath of Portland, Oregon, is shown as a park and others where bridges are labeled as being on land. In one New York example, Lexington Ave. is listed as being in Brooklyn, not Manhattan.

“Maps is an appalling first release,” David Pogue, the technology critic for the New York Times, said in a review this week. “It may be the most embarrassing, least usable piece of software Apple has ever unleashed.”

Apple fell 2.1 percent to $667.11 at the close in New York, paring the gain for the year to 65 percent.

To contact the reporter on this story: Adam Satariano in San Francisco at asatariano1@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net


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