Wireless
Manufacturers of standalone GPS products will have to move quickly and smartly to transform their dumb map readers into intelligent devices that can provide a host of services such as traffic avoidance.
Otherwise, they risk obsolescence in a future in which customers view navigation as simply one more application for their phones. Some of the newer apps already closely match what basic, dashboard-mounted gadgets can do.
“You have to redefine the category somewhat, like what Apple did with the iPod Touch,” said Ross Rubin, technology analyst for research firm The NPD Group. “That turned it from something that was just a media player into something that accessed the Web.”
Garmin, TomTom and other makers of satellite navigational devices could take a lesson from camera makers, which have convinced consumers that they still need standalone devices because there is a significant drop in quality with cameras built into cell phones.
Those GPS manufacturers now must make a similar argument for their devices or add enough extra services to give shoppers a reason to buy.
But there are unique challenges for gadgets primarily used while driving.
“The drivers attention should be on the road, not checking his or her Facebook,” Rubin said.
Manufacturers already have begun broadening their GPS products, adding wireless technology to some of their top-end devices to provide up-to-the-minute traffic data, nearby gas prices and weather information. Research firm Berg Insight estimates that more than 80 percent of navigational devices will have wireless capability by 2015.
Other products, particularly pricey units built into a vehicles dashboard, are 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 theyd be able to justify monthly subscription fees, which they dont currently charge for basic mapping and directions.
Satellite navigation devices have changed in recent years from being $1,000-and-up toys mostly for the affluent technorati to tools costing less than $200 and used by truckers, rental car customers and errand-running parents.
Although the economic slowdown has hampered sales somewhat, those devices are still popular. 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.
Google Inc. recently introduced a free application that calls out turn-by-turn directions, just like the standalone devices do, letting motorists 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.
Normally, that means the standalone devices pay for themselves in about a year and a half, as consumers avoid monthly fees for the basic features.
Googles freebie changes the dynamics.