Apple-Google Struggle Moves to Maps

The struggle at the top of the technology food chain between tech titans Apple (Nasdaq: AAPL) and Google (Nasdaq: GOOG) continues. Now the growing conflict has even spread to the world to smartphone map applications with the unveiling last month of a home grown Maps application from Apple. This is a straight on in-your-face effort to beat Google on its own home turf.

This move in essence ousted the Google Maps app that had come preloaded on the iPhone since its launch in 2007. Apple's version of Maps will come with local reviews from Yelp, 3D images of cities and turn-by-turn navigation.

What is interesting here is that this struggle over smartphone map apps is extending half way around the world to China. Here, of course, only Chinese companies are licensed to collect map survey data. So both Google and Apple have to work with local partners.

The two big players in this field in China are AutoNavi Holdings Limited (Nasdaq: AMAP) and NavInfo. Shenzhen-listed NavInfo works with major companies in China including Samsung,Nokia, Motorola and Baidu, but it is AutoNavi which has landed the really big fish in China. Apple recently selected AutoNavi as its partner for maps on its future versions of the iPhone and iPad in China. This is an intriguing choice since AutoNavi is already the partner for Google in China and has been since 2006.

This recent decision by Apple may change the battle for market share in China between AutoNavi and NavInfo in AutoNavi's favor. The latest data showed that AutoNavi had 52 million users for its mobile maps app at end of March 2012 while NavInfo had their maps app installed on more than 37 million handsets at the end of 2011.

Both companies started out with car navigation products. The main difference today is that AutoNavi is diversifying more quickly into technology for consumer devices more quickly than NavInfo which continues to be mainly focused on its auto division. This makes some sense since some of its mobile partners like Nokia are not doing so well.

NavInfo and Toyoya Motor ADR (NYSE: TM) recently formed a joint venture in China for the distribution of map data to car navigation systems in China and is scheduled to start services in 2013. Toyota will have a 39 percent stake in the venture. The joint venture combines Toyota's telematics technology with NavInfo's map production and management technology. Toyota and NavInfo's parent have cooperated on map data creation for car navigation systems since 1996.

Apple's move away from Google maps in China will hurt Google's mobile advertising sales. About a third of Google map users in China access the service via an iPhone, says Analysys International. This is important because mobile e-business in China is a growth industry. Mobile e-commerce is expected to generate $48 billion of transactions annually by 2015 in China, growing 26 times from 2011 levels. Mobile marketing itself will jump 10-fold by 2015 to about $3.85 billion. All of these figures come from iResearch.

What is important here is that for both mobile marketing and mobile e-commerce, about 20 percent of all transactions will rely on location-based technology like maps,matching merchants with consumers based on their specific location. Apple's move away from Google Maps in the burgeoning consumer market of China will obviously hurt Google.

The Chinese maps app battle looks to be just the latest conflict between the two giants. And it's one that Apple appears to be be winning for now. But the war between the two is far from over.

This article was originally written for then Motley Fool Blog Network. Make sure to read my daily market articles for the Motley Fool at http://blogs.fool.com/tdalmoe/.