Apple is facing stern competition from market incumbent Google in the online mapping tools market but from now on it is getting help from a Canadian big-data startup, Locationary.
On Friday it was reported by AllThingsD that the Toronto bcompany had been snapped up by Apple for an undisclosed amount. Locationary has created cloud-based data product Saturn, which manages and updates the online information local businesses want customers to have, including, for example, their locations, operating hours, and products offered.
Tom Forte, an analyst with Telsey Group, said the purchase of Locationary is likely part of an attempt by Apple to rectify its past troubles with online mapping services. When the Apple Maps app rolled out last fall, the criticism from consumers was loud enough to push CEO Tim Cook into issuing a public apology.
“I do think that the company, after having an initial disappointing roll-out of its own mapping service, is looking for ways to improve the quality of it,” said Forte.
There’s a big interest in being successful in the mapping aspect of the Internet marketplace, added Forte.
“Mapping can often be the gateway to local businesses, and then local businesses are important from both an advertising and an e-commerce standpoint,” he said.
Google has made mapping a high priority – in June the search engine acquired social media map app Waze, which allows users to update information about local traffic, and even police speed traps, in real time. Google reportedly purchased Waze for $1 billion, adding another dimension to its already-dominant position in the online mapping world.
In a study released by Citrix Systems in June, data showed that “Google Maps is preferred over Apple Maps on iOS devices throughout most of the world,” meaning most people would rather download the Google app on their iPhone than use the one that comes pre-loaded onto their device.
It all adds up to a daunting task for Apple, but the Locationary purchase “is an opportunity for Apple to improve the quality of its [mapping] product,” said Forte.
Scott Kessler, head of technology sector equity research for S&P Capital IQ, couldn’t confirm that Apple had purchased Locationary, but did note that Apple has made an effort to acquire mapping-related companies over the past few years. The company acquired Placebase in 2009, and 3D mapping company C3 Technologies in 2011.
Mapping “has been an area of perceived tremendous strategic importance,” said Kessler.
“In a world that’s becoming more and more mobile the appeal and importance of location information, maps, and satellite images increase pretty significantly, because suddenly people now want to regularly know where they are, where they’re going, what’s nearby.”
There’s only a few companies that have the resources to offer solutions to this need, Apple and Google chief among them. But Google Maps has really become a standard go-to app for consumers, Kessler noted.
“I think it’s going to be difficult for Apple to match that. On the other hand, Apple has tens of millions of proprietary devices in people’s hands, and they’ve shown over time that they know how to do these types of complex consumer offerings in very elegant and easy-to-use ways.”
Part of Locationary’s $2.5 million in funding was acquired in 2011 during a venture capital round. According to a release on the start-up’s website, previous investors Extreme Venture Partners and Plazacorp Ventures were joined by Trellis Capital and the Investor Accelerator Fund (a Province of Ontario-funded seed fund) in supporting Locationary two years ago.
Most interesting about the Locationary news is that CEO Grant Ritchie (also the co-founder of CanadianHotelGuide.com) wrote an opinion piece for TechCrunch last September entitled “5 Big Map App Issues Apple Must Solve.” In it, he noted the intricacies and difficulties of managing and “standardizing” the massive amounts of data needed for a successful maps app.
Apparently, Apple has taken Ritchie’s advice – and what his company has to offer – to heart.
CrunchBase records that Locationary has 14 employees and was founded in 2009.