Apple Buys Augmented Reality Vendor

(MoneyWatch)  Apple's "quiet" acquisition of Placebase in July doesn't actually have anything to do with either Google Maps or Latitude, all speculation notwithstanding. It has to do with acquiring a technology of great strategic importance that uses maps as a starting point for something bigger.

Placebase is a mapping software vendor (yes, like Google), but with an added twist: an application publishing interface (API) giving publishers the ability to overlay maps with public or private data. If that sounds familiar, it's because I've written that this kind of technology, known as "augmented reality" (AR) is the killer application for mobile devices.

On a desktop device, the information provided by this technology can be useful. On a mobile device, where you can see the layered information in real time through the cell phone's camera view finder, it becomes a real added value for customers as well as vendors. You could imagine all kinds of uses for this type of application, from providing information about public landmarks and events to private auctions and sales. (You don't actually have to imagine it, as vendors like Layar and Mobilizy have already introduced actual applications.) Writing about the potential for AR to give mobile devices an added layer of functionality, I noted several commercial applications already in use:

Layar's partners include ING, the financial services company, as well as a realty, a social network, a temporary employment agency and a health care provider. Mobilizy, which provided the video above, has a partner in the tourism industry, and has also worked with IBM and Oglivy to provide "layers" at Wimbledon.

What I also wrote back in late June was that AR was only available for Android-based phones. Then in July, just around the time of the Placebase acquisition, my colleague Erik Sherman noted a patent application by Apple "on having any portable device be able to identify an object and then obtain additional information about it."

Erik speculated that the other vendors "might have to get permission to do what they do, because, if granted, it would seem to give Apple a lock on augmented reality on a portable device." Now that we know that, when Apple applied for this patent, it was buying an AR vendor, it seems less likely that the iPhone maker wants to stop the likes of Layar and Mobilizy than it wants to protect the IP developed by Placebase.

Conclusion: Apple is going to replace Google maps, not to spite Google, but because it has better technology to offer in its stead. And this will certainly spur further development of AR functionality and features on more Android models as well as Nokia's Symbian, making AR more ubiquitous more quickly than most people expected.

Apple could have easily opted to license the AR technology, but given the strategic importance of the application, decided (intelligently, in my opinion) to own the vendor and the technology outright.