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Apple Acquires Embark, Another Mapping App With Transit Information
Apple has acquired yet another transit mapping application reports Jessica Lessin, this time it’s Embark, a Silicon Valley-based startup that builds apps for different cities to provide information about routes and stops. This acquisition follows the purchase of HopStop, another app that offers transit directions to users.
HopStop and Embark had different takes on the transit problem; HopStop orvides walking, taxi and bike directions in addition to mass transit routes and maps. Embark’s strategy was to spread out its transit apps, delivering one for each market it serves, which included major cities in the U.S. including New York, and other spots around the world to total around a dozen markets.
Embark had gained significant traction from Apple’s decision to get rid of transit directions built in to iOS with the launch of iOS 6; it saw 100,000 downloads in just a few weeks after the release, representing massive growth, and lots more trips planned. Apple’s Maps app itself directed much of that newfound traffic to Embark, since it came up as a top suggested app when users tried to search for transit directions in Apple’s Maps.
The success of Embark following Apple’s decision to ditch Google made it a strong target for acquisition now that the company appears to be interested in bringing back transit directions to the native Maps app itself, based on its HopStop acquisition. For its part, Apple says it simply acquires smaller companies from time to time and isn’t going to offer any further explanation, in a confirmation provided to Lessin.
In an interview I conducted back in September of last year, David Hodge of Embark said that getting really good transit results depended on focusing on one location at a time.
“What we’ve found is to get really good transit results, what you need is you need to be able to focus on a particular city and really make sure you get down into the details of ‘How fast do New Yorkers walk,’ for example,” he said. “You need to do a lot of work on data, you need to clean the results, you need to listen to your users, and there’s a lot of UX and design challenges that go into it.”
Hodge maintained that what Apple had before with Google transit directions worked “pretty well,” but that it was not particularly good in any place in particular, and offered instead that approaches taken by Embark would end up providing better directions despite Google’s absence from the platform. ”So for example, when Apple originally announced Google transit on the iPhone, what initially happened was that our downloads doubled,” Hodge said, maintaining that while Google transit brought the concept to the fore of people’s minds, Embark’s careful, tuned approach complete with things like offline route planning ended up being more appealing to actual commuters.
Developing…
Pandora Revenue Beats The Street, Grows 58% To $162M For Its Last Quarter Before iTunes Radio
Streaming radio platform Pandora just released its second quarter earnings, and it largely beat the street’s expectations. Total revenue increased 58 percent year over year to $162 million. The company reported non-GAAP EPS of -$0.04, a $7.8 million net loss.
Analysts expected revenue of $156 million and non-GAAP earnings of $0.02 per share. Pandora managed to beat on revenue but was disappointing on earnings. Now 71.2 million users strong, the company reported 3.88 billion of listening hours over the quarter, representing a 18 percent year-over-year increase. Yet, Pandora reported 4.18 billion listening hours last quarter. Even though revenue is increasing, people are listening less to Pandora. Moreover, it is still losing money.
Pandora is careful with its Q3 estimates as it expects between $174 million and $179 million in revenue with non-GAAP earnings per share between $0.03 and $0.06 after three quarters in the red.
Yet, the big elephant in the room is iTunes Radio. Over the past seven days, most analysts expected Pandora to report stronger revenue and profit than anticipated. It was indeed the case but this second quarter represents the last quarter before the introduction of iTunes Radio and Pandora’s future looks gloomy.
As the company notes, $116 million out of its $162 million reported revenue comes from its mobiles apps, or 71.6 percent. iOS is one of the two major platforms for Pandora, and it will now have to compete with a very similar product offering in the ‘Music’ apps.
Even more worrying, advertisers could move from Pandora to iTunes Radio ads, effectively menacing Pandora’s bottom line. Apple’s streaming service is supposed to stream an audio ad for every 15 minutes of music.
Apple will release iTunes Radio in iOS 7, which should be released shortly after the rumored September 10 press event. It will be available in iTunes for Mac and Windows as well.
The company is still focused on mobile revenue as it increased 92 percent year over year. It remains to be seen whether the company will be able to hold the same trend in the coming quarters as more players are providing a customized radio experience.
Over the past three months, Pandora got involved in heated debates over royalties. Many artists accused the streaming company of not paying enough royalties to music companies. The company had to defend its stance. Once again, most of the profit of this second quarter was spent on music royalties. A royalty increase would be very damaging to the company.
Shortly after the earnings release, shares were down 10 percent in after-hours trading. They are now trading down 3.5 percent.
Chairman and CEO Joe Kennedy provided the following statement in the earnings release:
“Our second fiscal quarter was an important inflection point in Pandora’s history. Strong momentum in our mobile business, with non-GAAP total mobile revenue growing 92% year-over-year to $116 million, clearly demonstrates the leverage in Pandora’s business model. To drive future growth, we are accelerating investment in new technologies, channels and capabilities that maximize the value Pandora delivers.”
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