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Locked in an escalating contest for the hearts and minds of smartphone and mobile computer users, Google (GOOG) and Apple (AAPL) are paying heed to an old real estate mantra -- the one that says the three things that matter most are "location, location, location."
In what appeared to be a pre-emptive strike, Google touted its popular mapping services at a San Francisco conference Wednesday, announcing new three-dimensional city views and other features amid reports that Apple is close to unveiling its own rival service that could replace Google Maps on iPhones and iPads in the near future.
Apple's move would be a blow to Google, according to analysts, who estimate that Apple customers account for up to half the people using Google Maps on mobile devices. But the competition over online maps is also part of a broader battle between the two tech pioneers.
Apple and Google have cooperated in the past by, for example, offering Google as the default search engine for the iPhone's Web browser. Today they are increasingly vying to deliver advertising, products and services tailored to the locations and interests of people who access the Internet while they're on the move.
"Right now, I've got an iPhone but (by using Google Maps) I'm telling Google everything about where I am and what I'm looking for," said Maribel Lopez, who tracks mobile technology at her tech consulting firm, Lopez Research. "The Apple guys are going, 'Hey, you could be telling us those things. We could be using that data.' "
Maps are important for both companies if they want to serve a growing audience of mobile gadget owners, agreed analyst Scott Ellison at the IDC tech research firm.
Surveys show maps are among the most popular features on smartphones. More than 95 percent of smartphone owners use them, according to Ellison, and 80 percent of mobile software applications -- from games to shopping, dining and social networking services -- have features or capabilities that are keyed to the user's location.
Apple and Google would each like to provide maps and navigational aids as part of a seamless experience that can lead users to tap into other products and services, he said.
Smaller companies also see gold in geographic information. In a recent study for Opus Research, analysts projected that location-based ads will account for 25 percent of the $2.5 billion that's expected to be spent on mobile advertising in the United States this year.
"What do you do on your mobile device? You ask, 'What's around me?' And when you ask questions like that, you're often looking to buy something," said Ed Lu, a former Google Maps executive -- and U.S. astronaut -- who is now chief technology officer at Hover, a Los Altos startup that's developing its own 3-D mapping applications for consumer use.
Microsoft and Nokia offer mapping and search-related services on mobile phones, as well. But as the 800-pound gorillas of the smartphone industry, Apple and Google are the major contestants in the location-services derby.
The two companies once had a close relationship. Observers trace their rivalry to Google's 2007 introduction of the Android mobile operating system, now used by several makers of smartphones and other gadgets that compete with Apple's devices.
Although Google was working on Android before the iPhone came out, Apple founder Steve Jobs reportedly was infuriated by what he called "grand theft" of the iPhone idea. Apple has since launched a series of patent lawsuits against companies that use Android in smartphones and tablets.
The competition has expanded further, as both companies have launched or acquired businesses that place advertising within mobile games and other applications. Through iTunes and Google Play, both have online services that distribute music, video and other forms of digital entertainment.
Each has even ventured into the other's core business: Some believe Apple's voice-activated Siri "virtual assistant" could evolve into an alternative to Google's Internet search service. And while Apple sells computers and other gadgets, Google recently entered the hardware sector by buying Motorola Mobility, which makes smartphones.
But industry experts say that smartphones and other gadgets are increasingly just a platform for delivering digital products. "All the differentiation is in the software and services," Lopez said.
While Apple has made no formal announcement, it has bought several startups that focused on mapping technology in recent years. The Wall Street Journal and industry blogs have reported that Apple may disclose plans next week for incorporating its own mapping services into the next generation of Apple's mobile operating system.
At a news conference Wednesday, Google executives touted their long experience and investment in mapping technology. Google Maps has a billion monthly active users, they said, and the company has mapped more than 26 million miles of roadways in 187 countries.
New features announced Wednesday include the ability to download portions of Google Maps onto Android devices, so users can find their way in unfamiliar environs even if they don't have an active Internet connection. The company also showed off new backpacks rigged with cameras that technicians will use to obtain "Street View" images of paths and trails in remote locations.
Google also plans to offer detailed three-dimensional models of major cities in coming months. Product manager Peter Birch said the company is using a fleet of chartered planes to obtain detailed aerial photos from different angles, which are then compiled into lifelike images of buildings, streets and even trees.
But despite several questions from reporters, Google Vice President Brian McClendon avoided commenting directly on Apple's plans. Google Maps are used on a variety of gadgets, including Apple's, he said. "We'll continue to make Google Map services available as widely as possible."
Contact Brandon Bailey at 408-920-5022; follow him at Twitter.com/BrandonBailey.
Source: Google
