Apple takes first bite at social media analytics

Madan Sheina, Lead Analyst, Software – Information Management

Apple has acquired social media search and analytics start-up Topsy Labs to better understand the needs of users of its smartphone and tablet devices and cloud services. Topsy specializes in analyzing the Twittersphere in realtime, gleaning customer sentiment and trends such as most-often-tweeted terms, key influencers on specific topics, and reaction to marketing campaigns.

Some of Topsy’s capabilities are likely to be pushed into Apple’s core products to bolster its consumer propositions. But with Topsy, one of the few companies with privileged access to all of Twitter’s data, now under its wing, Apple might be signaling a renewed push into the enterprise. One area that stands to benefit is the delivery of enriched location-specific services, driven through an analytically driven social context.

The deepest access to Twitter data in the market

As Apple comes increasingly under fire in some of its bread-and-butter consumer markets, the company could certainly benefit from a more granular and forward-looking view of what its customer interests are and how public conversations and opinion about Apple and its services are trending. Eavesdropping channels like Twitter is one way to achieve that.

Topsy develops technology that effectively plumbs Twitter data to monitor and analyze user activity and sentiment. Significantly, Topsy is one of a handful of partners that have been granted access to Twitter’s full tweet stream (“fire hose”), which now averages roughly 500 million tweets per day – a treasure trove of data crying out to be searched and analytically mined for valuable insights in realtime for a variety of purposes, including monetization by selling it to partners and customers.

Topsy has developed some fairly sophisticated algorithms that can hone in on specific terms, hashtags, and trends in the Twitter fire hose and analyze them against precise metrics.

Given its privileged access to Twitter’s full stream of data, it’s likely that Topsy closely consulted Twitter before relinquishing control to Apple. Twitter will be keen for both companies to continue to refine Topsy’s analytics as it, interestingly, does not (yet) have the capacity itself to do this kind of search and analysis.

Helping Apple and its partners smarten up online marketeering

Apple typically does so-called “bolt-on” technology acquisitions – i.e. small deals that can offer an immediate feature, service, or enhancement to its hardware customers, rather than those that simply provide a specific service it can access – that get integrated into existing or future products. However, there’s not a clear implication or indication for what Apple has in store for Topsy’s technology right now, and how it will exactly be applied to its product development.

Ovum believes it will be used to enhance several Apple services. For example, Topsy analysis might be able to recommend and push relevant media content to iTunes Radio users, refine Siri’s search methodology to find applications more easily, or monitor social media conversations around its products to drive more targeted marketing campaigns.

Delivering richer, greater social-based location experience for users

Owning Topsy and its access to Twitter data and its experience in interpreting that data will enhance Apple’s ability to create higher-value and higher-quality location-specific services and experiences to its users. Indeed, Apple has worked hard over the past couple of years to develop its own location services – underscored by its decision to jettison Google Maps from the core of iOS last year (driven in part by Apple-Android patent battles) and develop its own in-house alternative, which despite a rocky launch when it shipped with iOS 6 last year, has since stabilized.

Notably, a recent advancement in Topsy was a geo-location tracking ability, using landmark or local event markers to track where tweets originate.

Topsy also pairs well with other location-based technologies that Apple has acquired – notably Locationary (a Big Data start-up with a platform to parse, merge, and analyze data about local businesses and points of interest), Hopstop.com and Embark (which focus on navigation using mass transit systems), and iBeacons (for micro-level indoor proximity data).

Presenting its own effective end-to-end location system requires a lot of contextual information that guides the hypothetical user through a series of decisions that are informed by data from a variety of sources. Therefore, Apple not only has to find a way to integrate all of these location assets into both iOS 7 and Mavericks, but also additional contextual information such as calendar data and information about local businesses.

Signaling a bigger enterprise social media play

Topsy is an unusual purchase for a hardware-focused company that has made few forays into social media networking, albeit with mixed results: while its Ping music-sharing service dramatically folded after a cold response from users, Apple has made solid moves to make it easier for Apple device users to share photos and messages on social networks. But it remains unclear how deeply Apple wants to tap into social media and use Topsy’s data as a launchpad for social media integration of its iOS platform – although other device manufacturers make social media integration a point of differentiation.

Topsy will certainly be a learning exercise for Apple. If successful, Topsy’s technology and engineers could well be put to use for broader analytic initiatives that tap into other large data sets to extract broader and richer insights. While Apple continues to earmark the consumer market, it could also use Topsy’s technology to make some headway into enterprise applications, notably with its flagship productivity suite iWork.

Topsy’s technology could drive further integration between iOS and social media in ways that could pique the interest of cost-conscious small and medium-sized businesses (SMBs). In many ways the strategy to integrate these capabilities into the Safari browser could mirror how Google has moved to integrate Google Analytics in its Chrome ecosystem and entice third-party developers to provide plug-in social media tracking services. And if implemented correctly, it could even pave the way for Apple to forge a new market – the consumerization of Big Data. But that’s perhaps looking too far into the future.

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