Originally Posted by macarena
There is a lot more to this story than meets the eye at first glance. When the full picture comes out, people will realize that this has nothing to do with Maps. This entire story is about Search.
When the iPhone first launched, Google was paying Apple $100M to be the default search provider on the iPhone. About 2 years back, when relationship between Apple and Google soured, Apple upped the amount to $1B - and Google had no choice but to pony up. This was a whole lot of money, but not being the default search engine on iOS would have hurt Google even more, by allowing Bing access to the high profile customer base of Apple.
Before the launch of iOS 6, Apple is said to have upped this amount to $2.5B - and really turned the screws on Google. This is really painful for Google, but they still don't have a choice, because at this point in time, iOS is still way too important, both in terms of sheer numbers, as well as the profile of customers. But $2.5B is more than what Google makes out of iOS, which means, Apple was really hurting Google bad.
Google attempted to negotiate access fees for Google Maps and Youtube - but Apple called them out, and decided to evict YouTube and Maps from iOS. The story with YouTube is very interesting - being part of iOS, the YouTube app was not allowed to offer any ads. And being a free service, Google could not stop Apple from riding on top of YouTube, without indulging in anti-competitive practices. During the iOS 6 stand-off, Google decided to make up for the removal of YouTube by launching its own app, with ads. This was a no-brainer, because Google would actually make a lot of money doing this.
But when it came to Maps, the scenario was totally different. Google is not releasing Maps for iOS in an attempt to collect information about users on iOS. While that is useful, the benefit to Google from having a much better Maps implementation on Android (thereby adding a lot of value to Android) was a lot more. However, Google realized that the army of iOS users were helping Apple rapidly eliminate inaccuracies in iOS6 Maps. It was just a question of time before iOS6 maps became usable - literally months away. Absolutely the only way for Google to stop that from happening, was to release their own Maps app on iOS, in an attempt to slow down the momentum of corrections in iOS6 maps. If most customers had a very good alternative, there would be zero incentive for them to use iOS6 maps, and report inaccuracies. It is this motive that prompted Google to release iOS6 maps.
Paradoxically, Google Maps on iOS6 makes the iPhone the best mapping platform - and the only platform where you can access multiple mapping solutions from Apple, Google, Nokia, for free. This will increase adoption of iPhone 5 and iOS6, as even the doubters now have no reason to hold back.
And the worst part from Google's perspective, is that Apple can still up their demands for keeping Google as the default search engine on iOS. Google literally has no option but to pay up. The only way for Google to avoid this threat is to dramatically increase market share of Android, to make iOS devices.
And removing Google as default search engine will have even lesser repercussions than what happened with Maps. Whoever is really pissed and misses out on Google can still continue to use Google as their search engine, while the vast majority of users would not even realize that things have changed!
The best part is, Apple won't even be missing out on the money - MS would happily pay Apple any amount for selecting Bing as the default search engine - and this money makes sense for Bing, because it is attempting to catch up on Google. For Google, paying ridiculous sums makes absolutely no sense, since they are already the market leader!
All said and done, Google has come out worst out of the entire exercise - Apple takes back all the money Google makes from iOS, and iOS users still get to use all the stuff from Google - and get even more features than they had before!
The important thing to remember is that Apple makes its money off of hardware sales. Whether the customer uses iOS6 maps, or Google Maps, makes absolutely no difference to Apple in the short term. And in the long term, Apple can work on ironing out the glitches in its maps, and offer not just a technically superior alternative, but also a more accurate alternative.