When game theory doesn’t work…
http://www.redmondpie.com/poll-have-you-upgraded-to-ios-6-yet/
Redmond Pie is a website focused on technology news, views and reviews about products. This particular article talks about advantages and disadvantages of upgrading to the newer version of iOS. What’s more interesting is that the article has a poll underneath it that asks the readers a simple question: “Have You Upgraded to iOS 6 Yet?”
By replacing Google-based maps with their own maps, Apple has made many of its users angry and received a lot of criticism for it. Many people choose not to upgrade to the newer version of iOS and stay with the stable, bug-free iOS 5.1.1 (which also supports Google Maps) mostly because of lack of transit directions and inaccurate data. Having a good map service is one of the core functions of a smartphone nowadays. Everyone has a need for user-friendly and accurate maps.
In the poll, we can clearly see that the majority of users (2700 against 1800) decided to stick with the older iOS version. One of the biggest complaints was distorted graphics and lack of transit directions, essential functions that Google Maps has.
In class, we have discussed Game Theory and how decisions of each person can affect the outcome for both. Going back to the article, a question arises, was it a wise decision by Apple to release Apple Maps and completely get rid of Google Maps? Let’s construct a strategy table for Apple and an average Apple-product consumer and find out the best strategy for both of these “players”.
|
Apple \ Consumer |
Upgrade |
Don’t Upgrade |
|
Don’t release Apple Maps |
+2.5, +5 |
+2.5, -5 |
|
Release Apple Maps |
-5, -5 |
-5, -2.5 |
In this table, it’s very clear that for Apple the best decision would be to not release their maps in the new iOS update. The average user would be happy with the new iOS and Apple wouldn’t get any of the criticism that it’s been getting lately. Yes, Apple would not have their share on the map-market and Google would continue to power the default Maps application. However, had Apple not released their maps, most of its users would still upgrade to iOS 6 (as it usually happens with newer iOS on iPhones) and Apple’s reputation wouldn’t get hurt.
The decision made by Tim Cook, Apple’s CEO, clearly shows the user-reaction to the buggy service. 60% of people who voted in the poll in the article have too many reasons to stay with the current version of iOS. Looking at the table above, this is the exact reaction Apple should have expected from its user base. 60% of people who voted chose to stay away from upgrading simply because that would harm less their day-to-day routine: ability to use GPS with the Google Maps service (-2.5 in the chart against -5 if decided to upgrade).
Apple made a what-seems-to-be wrong decision here. Instead of playing their dominant strategy, Apple thought that releasing their own map service would be a better idea. In this case, the consumer’s reaction should be not to upgrade to iOS 6, therefore setting a Nash equilibrium at (-5, -2.5). Clearly, the Nash equilibrium should be at (+2.5, +5). But this is life and not everything in life follows mathematical models. Maybe Apple has something up its sleeve and this is a part of a bigger strategy. Only time will tell.
-naja_ox
I kind of have different view on this which I published on blog on 09/30/2012. I think you should have really considered the payoff table for Google vs Apple instead of Apple vs Consumer.
http://www.asksarayu.com/gametheory/apple-maps-and-game-theory/