Apple Needs to Go Into Search

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I've been thinking about Apple lately. OK, it's my job, but I've been thinking about a particular aspect of Apple, its future. Let me narrow that down further: when the company launched Apple Maps with the release of iOS 6 in September of 2012, it dawned on me that Apple needs to go into search, and in a big way.

iSearch

I'm not talking about a "ZOMG APPLE HAS TO COPY TEH GOOGLEZ" kind of thing. Companies like Microsoft look around at what the competition is doing and then freak out because they're not doing it. Apple isn't Microsoft, and I'm not suggesting it should try and be Microsoft.

Pardon me a moment. I just vomited on my desk and need to clean it up...

...

...

OK, so where was I? Google, Copy, Microsoft, check. Right.

No, it's not that Apple needs to keep up with the Jones's, it's that Apple is entering markets that would be enhanced by having its own search data. I think that Apple should embrace this reality and make a big splash with a major Apple search engine.

Maps

Apple had to go into Maps. The company might have dropped the ball on the rollout—launching Apple Maps as a beta while continuing to offer the old Google Maps-powered service should have been a no-brainer—but relying on a fierce competitor to supply what might be the single most important service on smartphones today was untenable.

Feel free to disagree, but do so knowing you are mistaken.

For Google, Maps was another way to learn more about us so that the company could then use that information to sell us to the highest bidder. The thing is that Maps and search go together like bacon and eggs, peanut butter and jelly, or cinnamon and green beans (try it—you'll be stunned at how tasty it is).

Search is one of those things where the more you know about the more you know, the more you know. It's using search results and the way people use those search results to refine how you get those results in a glorious virtuous circle.

For Google, this has the added benefit of getting more information to sell to advertisers, as noted above. That's how Google makes its money, and it's why Google wanted its Maps service on the iPhone to begin with.

For Apple, it's a different type of equation. Maps are a key feature on smartphones. For Apple to be competitive in that market, it must have a world class Maps app or it will eventually lose customers to platforms that do.

Had Google not gone into smartphones, Apple and Google would have remained very happy partners. Google did enter the smartphone market, and with the stated goal of preventing Apple from owning mobile, but that's another story.

Google vs. AppleThe end result was that control over user data, who gets what services, and how and when new features could be added were suddenly bargaining chips in their competition. As I said, that's simply not tenable for Apple.

But, Apple doesn't make its money from selling ads (to wit: iAd), it makes money on hardware sales. While the company doesn't need search data or maps data to sell to advertisers, it does need a great maps experience.

So Apple has to approach this from almost a diametrically opposed view point. It has to make Apple Maps the best it can be to keep people buying hardware.

The kicker is that the same symbiosis between maps and search still applies, even if the underlying business models are diametrically opposed. For Apple to make Maps the best it can be, it needs search data to improve search on Maps.

Siri

I'll let you in on a secret: Siri is much more than a cute trick or even a handy tool—Siri is Apple's long play on leapfrogging current computing paradigms, including search and even the graphical user interface.

Siri is taking us down a path towards full voice interaction with computers—or more specifically, a future in the cloud. It's starting with simple controls and local search, but it will eventually be much more.

It's going to take years and enormous amounts of user voice data to get to that point, but Siri will eventually be a very disruptive technology.

In the short and medium term, the local search aspect of Siri is important, and that has its own user data needs. Apple has already identified local search—restaurants, coffee shops, shopping—as its target of opportunity, but what Apple didn't say is that it can make local search better by having a better understanding of search as a whole.

It can only gain that understanding by getting into the search business. Just as with Maps, Apple needs to be in the broader search business—and by that I mean a search engine open to the world through a browser—in order to make Siri's local search service the best that it can be.

Apple currently pulls data from a variety of sources, including WolframAlpha and Yelp, to power Siri. WolframAlpha is awesome and dumping us off to Google for searches Siri can't handle is fine, but a world class search business would allow Apple to make Siri into something much bigger and better far faster than it could otherwise do so.

Steve Jobs & Reality

At a January 2010 Apple Town Hall meeting, the late Steve Jobs famously said that Google's mantra of "Don't Be Evil" was "a load of crap."He also said, "We did not enter the search business. They entered the phone business."

What Mr. Jobs meant was that Apple had made a conscious decision not to enter search, and what that means is that Apple considered it. To that end, you can be sure that Apple has a working search engine somewhere in its black labs.

Heck, Apple would be crazy not to have a few people draped in black cloth tinkering away on a search engine. You know, "just in case."

To me, the company should stop pretending that iOS is entirely its own thing. Services like Maps should go to the Web (more on that in another column), iBooks should be on my Mac and Windows, Siri should come to the Mac, and Apple should get serious about search all around the globe.

To be honest, I expect all of those things to happen at some point, but I am hoping it will be sooner, rather than later.

loljokesonyou

The funny thing is that Apple will be Googling Google if it does go into search. Or maybe it would be more accurate to say that Apple will be Microsofting the search giant.

Google gives Android away because all it cares about is getting user data that it can slice, dice, julienne, and sell. By giving Android away for free, Google completely undercut Microsoft's business model of open licensing (for a fee).

OEMs were able to adopt an OS without paying a fee for each unit sold, which was why so many Android devices were released even in the early days when it was a half-baked OS with extremely limited functionality.

That took a lot of potential share away from Microsoft, and Google's decision to dump Android hurt Microsoft just like Microsoft laid the hammer down on Netscape by giving away Internet Explorer.

If Apple got into search, the company would take share away from Google, and with that share precious user data that might slightly decrease Google's ability to know what we are thinking. More importantly, Apple could give away this service for free in order to sell more hardware, the polar opposite of Google's reason for giving away Android.

That's kind of funny, isn't it?

The question, of course, is whether or not Apple would get more aggressive about advertising, too. iAd revenue would barely be a line item on Google's balance sheet, but Apple would have the option of using all that new search data to add high-margin ad revenue to its own income stream.

Wall Street would probably be pretty hot for Apple to do just that. Doing so, however, could turn Apple into something closer to Google, and I hope doesn't happen.

I don't want my technology paid for with ads, and I don't want Apple slicing and dicing every little thing I do on my Apple devices in order to sell me to the corporate powers of the world. I am OK with Apple doing these things to make better services and products for me to buy, but I am not keen on being sold to the rest of the corporate globe.

Instead, we can hope that Apple would treat search as a loss leader used to make its ecosystem more powerful and more attractive.

If You Build It, They Will Come

Can Apple make a search engine that people will use? Of course. Google disrupted search because its results were better and because its interface was clean. I don't know that Apple can out-algorithm Google, nor am I suggesting that search is somehow easy (though even Microsoft has done some things right with Bing, so...)

I do know that Apple can make a search engine with an interface that will blow Google and Microsoft away. If Apple can launch a search engine that works, it will gain traction. Again, even Microsoft has been able to take share in that market.

Just Do It

As stated above, I believe Apple has the makings of a search engine at some stage of development. I'm surprised it hasn't already been unleashed, but Apple will probably do so at some point. Surely all those data centers the company is building are going to be used for something, right?

The company needs search data to make both maps and local search on Siri better, and it has the added benefit of depriving that information from its fierce rival Google. When you put all that together, it's something Apple simply has to do.

Image made with help from Shutterstock.

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16 Comments Leave Your Own

skipaq

They go together like peanut butter and bananas. If you haven’t tried it then you should. Which leads me to say I am in full agreement.

Bryan Chaffin

Throw in some mayonnaise, and Elvis might jump on board, too. smile

mjtomlin

“For Apple to be competitive in that market, it must have a world class Maps app or it will eventually lose customers to platforms that do”

No one is going to leave iOS for another platform just because of the Maps app. The iOS platform has many, many more mapping options than any other platform. Apple doesn’t need to offer the best, just something that works reasonably well. If people don’t like the built-in Maps app, they can download one of a dozen or so others, including Google’s Maps.

I do agree that Apple will eventually introduce their own search engine. They could expand Spotlight to include web results. Would be much easier to swipe left at the home screen and enter a search query there and have it bring back web results along with local search results. Siri then would be able to tap into this as well.

As it is, I no longer use Google - I’ve switched to Yahoo and sometimes use Duck Duck Go (just wish it was an option in the search bar).

RonMacGuy

Maps and search go together in exactly the opposite way that RonMacGuy and Bosco go together.

One word for you that Apple should do with all of their cash:  iYahoo.

Lee Dronick

“As it is, I no longer use Google - I’ve switched to Yahoo and sometimes use Duck Duck Go”

I have a machine that goes Bing

vpndev

Put the cinnamon on the rolls. Use nutmeg for the green beans.

vpndev

Thanks for an interesting and thoughtful piece.

For me, the essence - and the problem - is summed up here:
>But, Apple doesn’t make its money from selling ads (to wit: iAd),
>it makes money on hardware sales. While the company doesn’t
>need search data or maps data to sell to advertisers, it does
>need a great maps experience.
>
>So Apple has to approach this from almost a diametrically
>opposed view point. It has to make Apple Maps the best
>it can be to keep people buying hardware.

Google sells ads and has recurring revenue/profit. Apple sells hardware and has high initial revenue/profit but little or no recurring profit after that sale.* You might buy movies and music but there Apple tells us that there’s little profit in that revenue. Put another way, Google provides you search for free, sells ads and thereby finances search, maps and a bunch of other stuff. But Apple gives you Siri, maps, iCloud etc etc for life for a single one-time payment. There’s no recurring revenue.

If you want to see a company going mad about this, look at Microsoft. Its business model has always been increasing size of market and revenue from software upgrades. Your Windows license is machine-specific so you need a new one when you buy a new PC, and there are more of those every year - right ? (Yeah, right </sarcasm>). And everyone needs to upgrade Office every three years - right ? Well - the wheels have come off both of those busses. People have realized that nothing compelling has been added to Office this century, so they’re not buying upgrades. And that’s why Microsoft has been trying the $100/year subscription model with “Office 365”. To add insult to injury, as sales of PCs have been flat or falling because of the sales of iPads, MS has realized that its “add-on” sales model for apps is broken. With phones and tablets, mainstream apps are either included or inexpensive ($10 or so max). Very few would pay $100 for Office on an iPad even if Microsoft offered it. Microsoft’s revenue model is busted.

Apple is facing this morass. It’s not unavoidable but it is a looming problem. Apple can keep growing in new markets in a way that Microsoft cannot (software is too easy to pirate), and it can create new markets in the way it did with iPod, iPhone and iPad. But it needs to confront the issue of initial sales vs. revenue stream. Microsoft has tried and every attempt so far has failed. Apple has been innovative and it has been working. The question that investors are asking is whether Apple can keep it up over the longer term.

*Upgrades, to a new iPhone for example, are new sales and are not recurring revenue.

AK

How are you feeling now? Any good?

What about the headache? You can take some anti-vomit next time you write. Wish you a quick recovery.

Stan

My gripe with Google’s attending to my searches is that when I want to search outside of what THEIR algorithm considers my “style,” I get blindered results that keep me in my “style.”  Someone else who does exactly the same search gets a different result.  That’s frustrating.  I don’t want Apple to do the same.

aardman

@Vpndev “Google sells ads and has recurring revenue/profit.  Apple sells hardware and has high initial revenue/profit but little or no recurring profit after that sale.”

Is it really that important what the source is for that stream of revenue that a customer generates?  You’re stuck on the idea that a revenue stream has to come on the heels of some unique initial sale that generates a stream of low-ticket sales.  E.g. printer and ink, razor and blades, etc.  Apple actually stood that model on its head.  Instead of making money on the blades (apps, songs, movies), they make money on the razor (iDevice, Mac).  And contrary to your assertion, Apple does generate recurring revenue from its customers. In fact they generate a helluva lot of recurring revenue, it’s called ‘repeat hardware sales resulting from very strong customer loyalty’.

Every other ceo out there would sell their granny for that kind of repeat sales.  You’ve somehow managed to make it sound as if that is a bad thing. (The repeat business not the granny sale.)

mrmwebmax

+

Bryan,

To me, the company should stop pretending that iOS is entirely its own thing. Services like Maps should go to the Web (more on that in another column), iBooks should be on my Mac and Windows, Siri should come to the Mac, and Apple should get serious about search all around the globe.

Agreed completely, especially regarding bringing Maps to the web. There’s no way Maps has a chance of improving on Google Maps until people can start using it in every way possible, and that mens on the web. Agreed that all iOS services should be on the web as well. As for Search, agreed that if Microsoft can do it (Bing does sometimes out-Google Google, depending on the search), Apple can, too.

My two cents on an Apple Search: To truly differentiate itself from both Google and Bing, ditch ads. ALL ads. Try to create a backlash against Google selling user data by simply giving away Search for free, in order to improve services on iOS devices, like Siri. Tout better search results not tainted by commercial advertisements. (I know of many people—myself included—who never click on sponsored links in a Google search because those aren’t “real” results.) Apple surely has the cash to bankroll such an effort. Then Apple can make its own Search (iSearch?) the default on Safari and in iOS. Siri doesn’t serve up ads—and Siri is a search engine in many ways—so why not do the same (or lack thereof) in an Apple Search service?

vpndev

aardman - I agree that it’s a very nice revenue stream. But it’s one where the recurring cost of future services (Siri, Maps, iCloud etc) is not being funded by recurring revenue. This works when the market keeps expanding, such as with new products such as iPod -> iPhone -> iPad or increasing penetration in the marketplace.

For example, the iPod market is stable or shrinking now because just about everyone who wants one, has one. Growth of iPhone is still good but will flatten out in a few years (it’s not as far up the curve as iPod). And iPads are going gangbusters, being still near the beginning of the curve. But all will flatten out as the market saturates - as has happened with PCs and iPods.

When revenues from heady growth diminish to the rates for replacement and upgrades, that’s when the lack of annuity revenue bites. For ten years, Apple has been great coming up with “...one more thing” - they just need to keep doing it.

Lee Dronick

“My two cents on an Apple Search: To truly differentiate itself from both Google and Bing, ditch ads. ALL ads.”

Or at least make ads a lot less tacky. Web pages are starting to look like the TV screens from the movie Idiocracy.

http://creativebits.org/files/idiocracy-tv.jpg

Bosco (Brad Hutchings)

There’s an interview with Larry Page in Wired that really gets to the crux of what makes Google what it is. Bryan, while I see where you’re going with this, the juxtaposition of the Wired article and this one sets up a clear contrast between Apple-think and Google-think.

Fundamentally, what Apple will need to realize is that it doesn’t really own its products. It is a steward of its creations. Google totally gets this. There is room in technology for another 50 Googles exploring all sorts of things and profiting from being a good steward rather than putting up walls and turning on the cash vacuum to suck blood out of customers. There is room for Apple to be more like Google as an explorer and a steward, inviting others to come along for the ride, contribute to the direction, and profit from the experience.

I still buy and use some Apple products., but I ride with Google!

wab95

Very insightfully argued, Bryan.

Just a very quick thought before I try to get to my site ahead of the local street violence.

Your comment that Siri is ‘more than a cute trick’ or ‘handy tool’ cannot be overemphasised. Siri, even in its beta phase (which I would argue, relative to where this going, it still resides in) has signalled Apple’s intent.

I further strongly concur that search, in addition to expanded services and capacity in the cloud, are the two critical and complementary features that will enable Siri to become the user interface that is its destiny - and ours as Apple clients. Indeed, more than an interface, it will disrupt and displace computer user interfaces as we currently know them.

Whether or not pundits proclaim our arrival at that juncture as ‘the next big thing’ is irrelevant, and will matter less than, having so arrived, there will be going back; and if history is an indicator, Apple’s competitors will yet again wonder how they didn’t see this coming.

Now, if only Siri had the pre-cog capacity to guide around looming protests and street violence before it occurs…perhaps that will be the ‘the next, next big thing’.

Bryan Chaffin

GL with your local work, wab95—I can’t even imagine the things that are part of your daily life.

And thanks for the comments. smile

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