Apple's iPhone 5, which went on sale Friday included a new online maps service that was "littered with flaws, some laughable," The New York Times reported Monday.
But behind the effort to compete with Google is the lucrative territory of digital location-based advertisement.
"If you own a mobile ecology, as Google does, the other mobile ecology owners are not going to allow you to own tons of data in their world," Scott Rafer, chief executive officer of city map application firm Lumanic told the Times.
"And so neither Apple nor Amazon were going to let Google know where every one of their users was at every time," Rafer said.
Simply knowing the location of the owner of a mobile device is key to customizing services – pointing out the location of the nearest pizzeria, for example. But it is also key to customizing services search engines provide to their advertisers.
"Local is a huge thing for Google in terms of advertising dollars, and search is very tied to that," said editor Barry Schwartz at Search Engine Land.
"Knowing where you are, when you search for coffee, it can bring up local coffee shops and ads that are much more relevant for the user," Schwartz said.
Google executives were present at the event in which Apple launched its first iPhone, as the device carried Google's mapping service and YouTube, the Times said.
But that friendship vanished when Google introduced its Android operating system for mobile phones that now controls 60 percent of the mobile phone market.
The new iPhone carries neither Google maps nor YouTube, although Google can submit applications for both to the App store.
"Overnight, Apple has really taken out a significant chunk of Google's market, and it's much harder for Google to say to developers, 'We're the only game in town, come play with us,' " said Tony Costa, a senior industry analyst at Forrester.
"It will affect the Google ecosystem, putting it back in the same game of their apps lagging behind Apple, and that's not a good position for them to be in," Costa said.
In the meantime, the errors in Apple Maps have garnered some giggles, with Berlin being located in Antarctica among the notable glitches.
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