Fallout from the TeleAtlas-TomTom agreement – Where do PND makers go now?Author: Mike Ippoliti, Research Director, Telematics & AutomotivePosted: 28.July.2007 09:38 PM
It will be very interesting to watch what happens over the next weeks and months, to see if predictions of NAVTEQ’s sale come to pass. Will the purchase of TeleAtlas indeed cause a flurry of attempts to own the data at the heart of Location Based Services? Will Magellan, Garmin, Microsoft, Nokia, even Google, get into the game?

Thinking beyond just those companies however, what will it mean for the navigation marketplace?

I was chatting with a journalist yesterday, and told her my own view – that Garmin (in particular) should begin selling their navigation user experience to other companies. I primarily meant Automotive OEMs and Tier 1’s, but other navigation device and service companies could be included.

There are many subtleties to navigation software. Map data is key, but it really isn’t even one of the most important elements – especially if we look at overall customer satisfaction, not just number of miles mapped or number of POIs. The challenge lies in the routing algorithms, the user interface, the rendering of graphics, and any number of smaller decisions that add up to the user experience. Garmin has shown expertise in delivering a good navigation user experience. Why should Ford, for example, be paying Denso to buy identical map data from Navteq and develop a totally new navigation system, when Garmin has it all done, and working far better than anything yet created by any of the automotive suppliers? Because Garmin is a PND maker, a competitor? Not if they’re smart.

Looking into the future, it has been predicted PNDs are in trouble. The impact of pricing pressure is hidden by 30% per year growth. Things are great right now, but perhaps not so great in 5 years. Handset-based navigation will be common, as will basic navigation in your car. Where does that leave the single-purpose PND? In about the same place as the PDA today.

Ah, but the navigation user experience, the software, the ability to take the same map data as the other guy and turn it into a more pleasurable and effective tool – now there’s something worth money. Something that can’t be built for half the price by striking a better deal on NAND memory, or by using a different map data supplier, or even by owning the map data.

The journalist had an excellent analogy, which I’ll link to when she publishes her thoughts. For now we are both wondering: Does Garmin management see what we see?