The maxim "divide and conquer" (divide et impera) is a strategy used to acquire and maintain power based on the theory it is much easier to manage smaller opponents than one large one. This tactic has been applied by everyone from the Roman Empire to multinational corporations with great success.
Although Apple hasn't come out and said it is entering the search market, recent actions the company has taken looks like it is trying to take some power away from Google and give it to Microsoft's Bing. With that strategy already in place, Apple can now start acquiring assets to make itself stronger in the search market, which is worth tens of billions of dollars annually. The latest Apple acquisition, besides the much publicized Beats Electronics, is Spotsetter.
Spotsetter is an app with a social search engine that uses big data to offer better results using its patent-pending algorithm to gather information from social sites. It combines friend recommendations, trusted reviews as well as other data from social networks and reliable sources to provide personalized suggestions on top of a mapping interface.
As founder and CEO Johnny Lee told VentureBeat when the company launched, "The premise is that when people do search, it is becoming more and more personal. We wanted to take all the rich social content out there and provide information that is more relevant and endorsements that are more meaningful."
Google and Apple maps can give you the right address to your favorite eatery, but it doesn't tell you what your friends or review sites think about the chimichangas at the restaurant. Spotsetter scours information from Facebook, Twitter, Instagram and Foursquare as well as more than 30 review sites like Yelp, Zagat, The New York Times, Michelin, and TripAdvisor. Once the data has been aggregated it presents the best location for each particular search around your current location and elsewhere. Additionally, users can label their friends according to their expertise and use tags such as foodie or techie, so you know to take their advice when they recommend something on a subject in which you value their opinion.
According to TechCrunch, the deal was designed to secure Spotsetter's technology and talent, which includes two founders, ex-Google Maps engineer Stephen Tse and Johnny Lee, and others. Details of the deal have not been disclosed by both parties.
Whether it is Apple, Samsung or any other hardware manufacturer, once these companies reach high saturation points, they have to find new streams of revenue. Just like Amazon, which delivers a cheap device with a multitude of services, Apple is going to have to look beyond iTunes, and search can provide revenues for a long time if the company plays its cards right, because it has a customer base advertisers would love to target with more accuracy.
A new analysis about online shopping by IBM during the 2013 holiday season revealed iPhone and iPad users make more purchases online than Android users, with $93.94 to $48.10 per order respectively. An article in The Wall Street Journal also revealed the average household income for Mac owners is $98,560, compared to $74,452 for Windows PC owners.
If Apple can provide a search platform with more data geared to its own users, the millions of iPhone, iPad and Mac owners will undoubtedly make the migration. And with a customer base that regularly outspends Android and PC owners, the individual advertising rates Apple can charge will probably be higher than Google or Bing search, which would be keeping up with its phones, tablets and computers.
Edited by Rory J. Thompson