Apple (AAPL) has reportedly acquired HopStop.com Inc. and Locationary Inc. to improve its mapping services. However, the financials associated with the deals were not disclosed.
The current acquisitions follow Apple’s takeover of WiFiSLAM, a provider of indoor mapping application technology in March this year.
N.Y.-based HopStop.com provides direction-based application for the iOS and Google’s (GOOG) Android operating system. The application helps users find real-time directions to reach a destination by foot, bike, subway or car by the fastest possible route. The application can reportedly be used in more than 500 cities across the globe.
The other acquired entity, Toronto-based Locationary Inc. authenticates the existence of a local business that any mapping service can locate in real time. Currently, Apple uses Yelp’s (YELP) service for this purpose.
Traditionally, Apple has been using Google maps in its iOS-based devices. The company had been contemplating an entry into the market for a long time and had bought Placebase (Sep 2009), Poly9 (Jul, 2010), and C3 Technologies (Aug 2011) in order to boost its technology.
Although Apple released its mapping application with iPhone 5 in 2012, the botched up service received a fair bit of criticism, primarily due to inaccurate data. Since then, Apple has been focusing on improving the service and these acquisitions will significantly help it in this regard.
Moreover, it would help the company to compete with Google’s mapping service, which continues to dominate the market segment to-date. To maintain the lead in the mapping services market, Google recently acquired Waze Inc.
Apple has a knack for acquiring small start-up technology companies that can be synergized with its current product portfolio. Moreover, these acquisitions enable Apple to deliver ready-made solutions and technological know-how for specific problems. We believe that this acquisition policy would benefit the company in the long run.
Other than this, Apple’s ability to gain traction in developing nations, where the market is more cost-sensitive, will determine the company’s fortunes in the future. Additionally, Apple’s loyal customer base coupled with its solid balance sheet and robust revenues bode well for the company.
However, Apple continues to face significant competition from the likes of Samsung and Amazon.com (AMZN) in most of the markets it operates. Lack of product innovation and product delays could cast a shadow over Apple’s growth opportunities in the near term.
Currently, Apple has a Zacks Rank #3 (Hold).
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