Tuesday, June 30, 2009

The Portable GPS is Fast Becoming a Dinosaur

As we were driving down to our monthly Wigix board meeting last week, I was looking down at the Garmin Nuvi 260W GPS in our car and remarked to my co-founders how I felt the standalone GPS device will soon become extinct. The technology behind them has become quite commoditized, as evidenced by the incredible drop in prices over the past few years...the GPS you can now get for $200 outperforms the $700 GPS from just 2 years ago. But price isn't the only thing at play here...there are a couple of other significant factors that weigh into my assertion:

  • Automobile manufacturers make it very difficult for one not to purchase the navigation option on new cars. Despite the fact that built-in navigation typically adds $1000 or more to the price of the car and the units are generally less feature-rich than their standalone counterparts, the tight integration they have with the car itself outweighs this and so people don't seem to have a huge problem paying for it. Plus, since most people finance their automobile purchases adding another thousand bucks to the total cost isn't going to make a huge difference in their monthly payments.
  • The proliferation of smartphones such as the latest iPhone 3G S allows for GPS applications to be run from the phones themselves. Many smartphones now include an embedded GPS chip, and it won't be too much longer before mapping applications will rival those now seen on the standalone units. In fact, I believe TomTom announced during the 3G S launch that plan to release a full-fledged mapping app for the iPhone this summer. In this era of device convergence this is another nail in the coffin for the standalones.
What will save the GPS companies is their ability to recognize the above and to adjust their business models accordingly. I really don't follow the specific companies too closely, but I will say that Garmin seems to have a done a pretty good job in tweaking their model in anticipation of this technology shift. A few years back they launched their first activity-specific units, i.e. devices for specific activities that benefit from having built-in GPS. As an avid cyclist I jumped on this immediately by purchasing a Garmin Edge 305, which I still use on a daily basis. The nice thing about the 305 is that it offers all the standard functions of a cycling computer (time, distance, altitude, etc.) but other capabilities such as course mapping and integration with Google Maps that would be impossible without GPS technology. And no ugly wires, magnets or wheel sensors to mount on the bike either...very cool. Anyway, I recently noticed that Garmin has expanded their offerings to include a golfing device which allows you to display where you are on the course and determine your distance to the pin, and believe it or not...a dog collar with built-in GPS that allows you track the whereabouts of your furry friend. Now how cool is that?
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