$2000 vs $25 for a Car GPS System


Google Maps

(Above: Google’s Directions – Walking, Not Driving Though)

Why would anyone want to spend $1000, $2000 or $4000 on a built-in car GPS system when their Android phone or their iPhone (just not the latest one) gives near perfect directions?

Consider further that these Smartphone maps are updated every day or so (no more having to insert DVDs in car dashboards to update antiquated mapping software) and you can see why spending $2000 or even $4000 on these GPS systems doesn’t make sense to an increasing number of drivers and car buyers.

Forward thinking car makers such as Ford and Chevy seem to get it and seem to be not only making it easier on buyers but are also trying to figure out how to capture a piece of the pie:

Ford has teamed up with the navigation company Telenav to enable …a $25-a-year app, Car Connect, (that) lets drivers connect Android phones to the dash. They can have maps displayed on the car’s screen, use hands-free voice commands and hear directions through the car’s sound system. Also included are traffic information, red-light camera warnings and speed trap alerts, features rarely found on in-dash systems.

Chevrolet’s new compact, the 2013 Spark, is the company’s first vehicle to offer a similar feature (with a $50 Smartphone app).

Taking this one step further, Pioneer and Sony, companies that make car receivers are adding touch screens and consoles to create all in one” car consoles (not cheap though) – ones that can handle not just maps and directions, but also Pandora and any number of streaming radio apps (Sirius, take note).

So what happens to the likes of Garmin, Navistar, TomTom and Telenav – that make stand-alone GPS devices that sold for hundreds of dollars (I still have the $900 TomTom device that I bought way back when, somewhere…) or supplied Ford et al with their expensive add-ons?

Tom Tom

Perhaps trucking fleets, commercial vehicles, boats, etc., will still use their dedicated GPS devices but I just can’t see every day drivers doing that – not when Smartphone apps can do a hundred different things for free – all for a low monthly fee. A Wired magazine article agrees. Perhaps like many others they need to figure out a way to bundle a bunch of useful driving/navigation features that Google/Apple can’t/don’t offer and sell that as an app that requires a monthly subscription fee?

For now, the only saving grace for these companies might be that older car buyers and drivers may (many, not all) still like having a GPS device that does one thing and one thing only, but consumer behavior for anyone under 30 or even 40 today (many, not all again) is probably quite different. But that means that its just a question of time before GPS device sales fall off and hope is generally not a good strategy:

Berg Insight, a Swedish research company that tracks the navigation industry, estimates that the number of personal navigation devices shipped globally will peak in 2011 at 42 million, up from 40 million this year, before beginning a gradual, but inexorable decline.

Chalk another one to the disruption caused by the “app economy”.

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