Mobile Computing News

Photo: Garmin

The GPS navigation industry has experienced unbridled growth. Virtually unchallenged, TomTom and Garmin, the biggest GPS navigation companies in the world, have generated profits from the sale of devices and the separate sale of location-specific map packs. Google has since thrown a spanner in the works, and Nokia followed suit.

The Google Factor

Photo: Google

Google is essentially an advertising company, first and foremost. Internet search is merely a conduit for advertising. So, as Google has generated profits from advertising, it has grown its search platforms to reinforce its advertising business. Google Maps, Google Earth and YouTube all strengthen these strategies. Google Maps, easily the most advanced map application in the world, recently updated its GPS navigational program for Android phones to include voice navigation, turn-by-turn navigation and all the other functions you would expect in a premiere GPS device. The problem for Garmin and TomTom is that Google have made this application available for free. In addition, it is Internet connected, which is a feature very few standalone GPS applications can offer.

Nokia

Photo: Nokia

Nokia, not to be outdone by Google, updated its GPS application and released it on its Ovi Store for free, too. It’s currently available for the N97 only, but Nokia has indicated it intends to make it available for all its smartphones in future.

TomTom and Garmin’s problem

Boiling this down to numbers, this means that over 10 million Android devices and millions of Nokia devices are presently ready to have navigational software that once cost over £300 each for free.

Photo: Tomtom

Garman and TomTom investors aren’t ignorant to this threat.  Garmin’s shares dropped 16% and TomTom’s 21% within a day of Google’s announcement. Google Map Navigation could very well show up on other phones and other platforms altogether, which undermines the viability of standalone GPS devices and GPS applications on Smartphones.

So what are GPS companies to do? Well, that is not an easy question to answer. No company in the world has Google’s engineering resources, so to catch up to the feature sets available in Google’s application will be very difficult. Furthermore, it’s impossible for companies that make their revenue exclusively from the sales of GPS hardware and software to lower their prices significantly. What Garmin and TomTom need to do is come up with ways to reposition their devices as being the best on the market, and well worth spending money on. However, given how widespread smartphones are, it is likely the standalone consumer GPS device will soon be no more.