Wednesday, 18 July 2012

What’s Apple Plotting?

It’s been an interesting week of power plays, Machiavellian manoeuvring and plot twists for the travel and tech world; Yahoo! pilfers a top Google exec, Apple ‘friends’ Facebook, turns its back on Google and plants a firm flag into the online travel business,  leaving many wondering just what are they up to?

After much speculation, fanfare and good ol’ fashioned rumour mongering, it now seems that Apple has crystalized their intentions towards the online travel industry by unveiling its Passbook app. This app will be built-in to the iOS 6 for next-gen Apple devices and is the latest in a series of patents linked to Apple’s much vaunted iTravel system. In essence, both enable iPhones and iPads to store all necessary travel information (identity, e-tickets, flight info & notifications) manage their trips (check-in, track luggage, receipts, frequent flyer and loyalty accounts) as well as will utilize NFC technology iWallet to purchase flights, hotels and upgrades. With all this functionality housed in a single pre-installed app in devices which command roughly 60% of the overall smartphone and tablet market, it’s easy to envisage how Apple could steal a massive chunk of the online travel pie.

In a move that mirrors Google’s 2011 dive into the online travel industry, this is a statement of intent that leaves little doubt that Apple is eager to follow suit and leap-frog Google’s hotel finder and flight search. Apple is yet to comment or even announce the iTravel project but it is safe to say this blueprint will have many a fat cat scrambling to the war room. What is less certain is exactly how Apple will pull this off and who is standing in their way.

Here are few fanciful / ill thought-out scenarios;

A company with a market cap of $600 billion could simply buy its way into the market by acquiring a major OTA, GDS or metasearch player to power search and booking capabilities or it could partner with selected suppliers and TMCs who would be eager to tap into Apple’s enormous global consumer base. Providing inventory to iTravel would earn brands unprecedented visibility and allow them to slash their app development and marketing costs as well as reduce dependency on the big G and other intermediaries. But at what cost? iTravel would essentially be akin to partnering with Priceline or Expedia and will likely come with a hefty commission fees and stringent pricing terms and conditions. 

Any airline or Hotelier would also be loath to surrender their hard earned/bought customers to yet another intermediary but they might not have the choice as iTravel is a far more elegant ‘all-in-one’ travel tool which will be pre-loaded into all iOS devices, starting with the launch of the iPhone 5 this autumn. Even more brilliant is the fact that Passbook will be available by download on all ipads and from iPhone 3s onwards. That means that in one fell swoop, Apple will be able to launch the app service to it’s 370 million iOS customers, most of who’s payment details they will already own.

Another interesting turn is Apple collaborating with popular consumer websites such as Yelp and OpenTable for the next version of Siri Search. This in effect will provide a socially contextualized alternative to Google search and Voice Search and reinforce Siri as a trusted concierge and go-to resource for ‘casual search’.

Perhaps more indicative of the growing cold war between the former allies is the exclusion of Google maps and Streetview from iOS 6. Apple has taken great pains to replace this with its own cartography and geo-location technology called Flyover view (allegedly powered by TomTom) which boasts turn by turn directions as well as traffic warnings, weather notifications and travel advice. With the iPhone 5 Apple has not just kicked Google out the party, it has also jumped into bed with mutual rival Facebook, presumably to cosy up with the company’s 800 million active users. The iPhone 5 will be heavily integrated with Facebook to make it easier to share contacts, photos, calendars, music via Spotify and all the other social bells and whistles. With the budding NFC and mobile advertising industries poised for huge growth, the stakes could not be higher, or more lucrative.

What is clear is that under new CEO Tim Cook, Apple is headed in a bold and ambitious new direction that will have many travel companies rubbing their palms, scratching their heads - or banging them on a the nearest wall. I’d be very interested to hear some industry perspectives of this so do please weigh-in and let us know - Apple: Friend of Foe?

By Marco Saio
Director of International Research & Projects
EyeforTravel Ltd

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