TomTom’s Partnership With Google Will Lower GPS Prices - Or Make It Free
TomTom and Google announced a partnership today, and it is a particularly interesting one. Tom Tom, maker of the popular portable GPS systems many people use in their cars, plans to let users send addresses from Google to their devices.
While Tom Tom already has “Points of Interest” on its devices, Google Maps will soon be able to be transferred right over with one click. This should cause a lot of moving around in the young industry, and here are some thoughts on what might happen.
Analysis
This is a huge step for Tom Tom because it will make their product much more useful, and interconnected with the web. I see several things happening because of this:
1) Market Share: Tom Tom will increase its market share, and early adopters will flock to pick up a Tom Tom with Google Maps capabilities. The question is what will occur to the market size overall.
2) Survival: The stand-alone portable GPS may be a hot gift this holiday season, but if you look at all the emerging technologies that offer a similar service, it loses much appeal.
For example:
- iPhone (and other smart phones) have hacks, My Location, or built-in GPS services already.
- Ordinary cellphones can use services like Verizon Navigator to get GPS directions.
- More and more cars are bought with built-in navigation systems.
- Laptops becoming smaller and having longer battery life.
- Portable bookreaders (like Amazon Kindle
3) Advertising: Google clearly wants to be more significant in the offline advertising landscape, especially since web advertising is expected to experience a bit of a slow down next year. How might the TomTom partnership help Google accomplish this?
- Placing “sponsored links” on a CPM basis in the navigation maps to local businesses.
- Showing users “competitor” locations to the store they planned on going to.
- Eventually offering basic Google tools like web search on the TomTom devices.
4) Price: It is in Google’s best interest that MANY people use their maps service, and they just might be willing to subsidize the cost of one for buyers in return for the right to place local business ads in the TomTom maps. Throw on top of that all of the competing devices listed in my second point above, and there is additional pressure to lower these $200-400 devices to compete better with the other devices (some as cheap as $10/month, like Verizon Navigator). All of this points to one direction for price, and that is down.
It will be interesting to see if Google takes the same approach with TomTom’s competitors, such as Nokia (which is in the process of buying NavTeq) and Garmin, and teams up with them too, or if they remain exclusive to TomTom.
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December 7th, 2007 at 9:26 am
iphone is a bit too big as a cell phone and too small as a personal navigation device (PND). Most people want a fold-up phone that is as small as possible. If iphone has GPS display and is up on the dashboard for navigating, user loses the option of holding it up to the ear while driving when a call comes in or is made. Many won’t like that situation and will prefer to have a seperate device for navigation that links to a cell phone via blue tooth and can be stowed in the glove box together with it’s bean bag mount.
Verizon Navigator voice only navigation devices without visual display do not offer enough ques for the driver. If a cell phone does have a navigation screen display, it is too small to see while driving and won’t mount on the dashboard very well. Heads-up-display offered by a PND is easier to look at while watching traffic ahead.
A very small percentage of cars are built with built-in GPS. Most people don’t want them because portable PND on a beanbag mount on the dashboard is much cheaper, can be transferred to other cars, can be stowed to deter theives, and is at eye level while watching traffic ahead. Volvo is currently building flip-up PND mounts into dashboards
Laptops with built in GPS are not very practical to use while driving as they won’t sit on the dashboard very well. If the drive must lower his head and look to his right to see the screen, he must take his eyes off of the traffic ahead which is not very smart.
Portable book readers are currently built into PNDs.
Your article is not very well thought out.
Thomas,
I hear you on some of those points, although people can (and do) use their cell phone holders or other holders to keep their cellphone in plain view while driving - hence the explosion in sales of cell phone holders for cars.
The majority of phones today have a bright enough screen, and large enough to see from a foot away, and you can either hear the driving directions by bluetooth in an earset, or even over the car’s speakers.
Finally, while the PNDs do have the advantages you mentioned, nothing replaces an all-in-one system of entertainment, directions, and car alerts for many people, and that is why they opt for the built-in nav system (often at an expense of $2,000 or more).
December 7th, 2007 at 8:15 pm
Some excellent points, Pinny. Currently, many people do use cell phones as PNDs (though not exclusively), for locating restaurants, shops, etc., particularly while walking in highly congested urban areas. The iPhone, for example, which has sold like hotcakes since its first release seems to be big enough for surfing the web and small enough to use as a phone. And of course, there is always Bluetooth for hands-free usage, so sticking in a tray or on the dash is not out of the question. Same goes for other PDAs of a similar size.
TomTom already sells a PDA-version of its software on a chip, so clearly, they are looking at that market. Additionally, they sell a couple of very nice motorcycle/scooter models which could play well in countries with large populations of two-wheeled transport (e.g., Brazil, Italy, China, Taiwan).
For TomTom, the deal with Google allows them to let customers leverage the innumerable user-generated mashups out there. It also gives TomTom access to other Google tools, such as Google Notepad. You or a passenger could easily select an address, or even a map snapshot and save it to a file or send it to your Gmail account or to other people’s email accounts. I’m sure TomTom and Google can find a way to make a simple button/widget for selecting and emailing.
Also, access to information in social networking sites like TripAdvisor would be especially useful in a PND. At any rate, there are many reasons why Google and TomTom would seek out this partnership. Your post stimulated my thinking on that. Thanks!
Mark