Re: PNDs
lbs.gpsworld.com
Garmin and TomTom have between them perhaps 70 percent of the personal navigation market; a huge gaggle of competitors hope to win a share. This is a battle about branding. The bigger story, however, is the continued fall in prices of PNDs and in-vehicle nav systems.
Feb 15, 2007 - By: Mike Sheldrick
Prices Falling
Somewhere between 70 and 150 nav systems, many of them from new entrants, were displayed at the mammoth Consumer Electronics Show (CES) in Las Vegas in January.
Conflicts prevented me from attending CES this year, so I can’t vouch for these figures, but they tally pretty well with everything else I see and hear. The actual count probably doesn’t make a difference. Right now, Garmin and TomTom, taken together, are navigation’s iPod (in the United States, Garmin could arguably claim sole ownership of that title). They have between them perhaps 70 percent of the market; a huge gaggle of competitors is hoping to win a share. This is a battle about branding. It remains to be seen if Garmin, the current PND leader, or TomTom (or even Magellan) could become the next iPod.
Apple itself could jump into navigation. Prudential Securities analyst Jesse Totora set the nav blogosphere abuzz last week when he predicted that the next generation (non-phone) iPod would include Wi-Fi access and GPS. And since navigation is already on cell phones, it would be reasonable to expect that future versions of the iPhone will include GPS and navigation.
The bigger story coming out of CES, and since, is not the flood of new PNDs, but the effect of this heightened competition: the continued fall in the prices of navigation devices, both in-vehicle and PNDs. Pioneer shocked the aftermarket navigation market by pricing its new feature-rich navigation A/V system, the AVIC D3, at about $1,000. Some analysts think that makes it as much as $600 below the competitors prices for equivalent units. PND prices are between 25 and 40 percent below prices before the Christmas shopping season. While the freefall is broken, it’s likely that there will be continued price erosion.
This was followed by a Garmin announcement that Ford Component Sales LLC, a subsidiary of Ford Motor Co. would begin offering Garmin’s Nuvi 680 and 360 in Ford, Lincoln and Mercury dealerships across the country. On its face, this deal is puzzling. Many analysts believe that, eventually, dedicated in-vehicle navigation will disappear, to be superseded by a system to host a phone- or PND-base nav systems. Under this scheme, the car would provide a full-sized display, voice output, and possibly voice recognition.
But that transition has been expected to take years. Most projections are for sales of in-vehicle navigation system to grow modestly or remain essentially flat. By offering PNDs at its dealership, Ford risks cannibalizing its in-vehicle navigation system sales, which are quite profitable. The Garmin PNDs will not be integrated into the vehicle in any way, although it may be possible to pass route instructions to the audio system, via Sync, Ford’s new platform that allows drivers to play iPods and MP3s in the car.
Veteran analysts take differing views of the Ford/Garmin deal. Gartner’s Thilo Koslowski thinks Ford may be making a canny move to position itself for the new navigation paradigm – that is, hosting the carry-in device. Clem Driscoll thinks Ford may be attempting to broaden the appeal (and awareness) of navigation to Ford buyers, and at the same time, provide dealers with an opportunity to boost revenue.
These two views are, in fact, complementary. At the moment, Sync only hosts carry-in audio devices. But navigation is definitely on the menu. In fact, Sync is based on Blue&Me, a program Microsoft and Fiat have been working on since 2004, and which they introduced at the Geneva Auto Show last year. They have a rudimentary nav system (using arrows and voice, similar to OnStar’s directions). Microsoft says that both Blue&Me and Sync will provide an open navigation interface, thus allowing other nav systems to link with the system.
Still, neither Blue&Me nor Sync yet provide the support necessary to allow device-based navigations to function like a dedicated in-vehicle unit. That will take development of a platform to permit seamless integration of carry-in devices with the vehicle similar to what Siemens demonstrated at Convergence last year, and more recently, at CES.
The Ford move may signal that the in-vehicle navigation is losing ground sooner than expected.
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