GPS cell phone apps challenge standalone devices

01 December 2009, 12:25pm

Proliferation of cell phones with built-in global positioning technology is causing uncertainty for PND manufacturers, whose standalone GPS products will need to be transformed from dumb map readers into intelligent devices that can provide additional services, such as traffic congestion avoidance. In the future, customers may view navigation as simply one more application for their phones, with some newer apps already closely matching basic, dashboard-mounted gadgets functionality.

Garmin, TomTom and other makers of satellite navigational devices could learn from camera makers who have convinced consumers that they still need standalone devices (digital cameras) because of the significant drop in picture need a similar argument for GPS devices or add extra services, such as adding wireless technology to provide up-to-the-minute traffic data, nearby gas prices and weather information. Berg Insight estimates that more than 80 percent of navigational devices will have wireless capability by 2015. The more expensive units built into vehicle dashboards are already coming with the ability to play digital audio files or act as an Internet hub for the driver and passengers. These features could give manufacturers new revenue streams, as they'd be able to justify monthly subscription fees, which they don't currently charge for basic mapping and directions.

Research firm In-Stat estimates that worldwide unit sales will rise 19 percent this year from 2008 and grow 13 percent next year. The NPD Group says U.S. sales are up 4 percent to 4.7 million through September from the same nine months in 2008. But cell phones are now offering similar GPS-based navigational features - for free - on devices with software from one of the Internet's top brands. Google recently introduced a free application that calls out turn-by-turn directions, letting drivers concentrate on driving without having to constantly look at the phone for written directions. The app was launched on the Droid phone for Verizon Wireless a few weeks ago and expanded this past week to include myTouch 3G and the G1 for T-Mobile. The three main wireless providers, AT&T Inc., Verizon Wireless and Sprint Nextel Corp., also sell their own turn-by-turn mapping applications for $9.99 per month -- or include the apps in an unlimited data plan.

Besides helping wireless carriers poach potentially thousands of customers, cell phones will likely also accelerate the decline in prices for navigational device - already down 25 percent from last year to an average of $175, according to NPD. Standalone devices can pay for themselves in 18 months, as consumers avoid monthly fees for the basic features, but Google's free offering changes these dynamics.

Navigation device makers are trying to make inroads in the cellular market, with both Garmin and TomTom offering US$ 99 applications for smart phones. Garmin also introduced the nuvifone, a cell phone with many of the features of the company's line of GPS devices. Sold though AT&T, the nuvifone has been disappointing, but Garmin says it will release newer versions, including one next year for phones running Android, the Google-made operating system on which Google's own mapping application can run. But entering the cell phone market may be a mistake, because navigational device makers should emphasize their strengths in mapping software and location-based services.

Source: MIT Technology Review online news

Copyright 2009 The Associated Press and Technology Review 2009

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Geo: International