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Four Reasons Why Apple Might Not Be Interested in Waze

Apple_waze

When rumors circulated earlier this year that Apple was mulling a bid to acquire social navigation app outfit Waze, the company quickly and aggressively quashed them. Within 24 hours of the rumors hitting the news cycle, a handful of “sources close to the situation” stories popped up debunking them — including one from the outlet that published the original report.

Now with Facebook in advanced discussions to buy Waze for a reportedly heady price tag, Apple’s rumored interest in the company is once again the subject of discussion. While January reports of an actual on-the-table deal may well have been “fabricated,” sources tell AllThingsD that the two companies have held talks in the past.

But sources in both the Apple and Waze camps seem to have very different perspectives about the tone and content of those talks, and just how serious they may or may not have been.

Now, as Facebook steps up its courtship dance to the billion-dollar level, could Apple step in and play the spoiler?

It’s certainly possible. Apple’s iOS Maps fiasco last year gave the company a very good reason to seek out deals for alternative sources of mapping data.

But here’s the question: If Apple — with its unmatched war chest and Maps PR nightmare to go through — was seriously interested in acquiring Waze, why didn’t it do so then, when it was very much on the spot to improve its map client?

A few reasons:

First and perhaps foremost, a significant portion of Waze’s data set is collected through the company’s Google Android client. If Apple were to acquire Waze, it would need an elegant answer to the Android question. And right now there isn’t one. Kill the Android client, lose a lot of data and user goodwill. Maintain the Android client, support an app for your chief rival in the mobile space.

Second, even if Apple did buy Waze outright, the integration challenges are daunting. Apple is already sucking a lot of mapping data into its Maps back end. At the time it launched, iOS Maps was using data from more than two dozen sources. Adding yet another — particularly a crowdsourced one like Waze — would require some serious engineering work, and perhaps some vetting of Waze data for accuracy and completeness.

Third, an acquisition of Waze would require a rethinking and likely overhaul of Apple’s current maps strategy, and the licensing deals on which it has been built.

Finally, Waze’s asking price is very high. Sources familiar with the matter said that Waze CEO Noam Bardin has had no problem walking away from offers he’s considered “lowball” in the past. But now that Facebook has shown willingness to shell out something in the range of $1 billion, the money is serious enough for Bardin. While Apple doesn’t have a history of overpaying, Facebook — with its mobile and local ambitions — may be willing to go over the top.

In other words, anything’s possible. But in this case, it’s not entirely logical.

Apple declined comment on its relationship with Waze and any talks the two companies may have had. Waze declined comment, as well.

Here is a video of Bardin talking about Waze at our D: Dive Into Mobile conference in April:


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