The personal navigation device (PND) industry is being forced to adapt its offerings to stave off growing competition from the smartphone segment.
Navigation is a growing trend internationally and locally, but the mobile phone could be the death knell of automotive PNDs.
Arthur Goldstuck, MD of independent research company World Wide Worx, says handheld navigation systems will soon be a thing of the past. “We will see as many GPS devices in landfills as old phones before long.”
Goldstuck says applications such as Garmaps for mobile and Google maps are making the smartphone a more popular way of navigating. He explains that people would rather purchase one device than two, and this is more cost-effective. “Already, we are faced with a clutter of gadgets and devices.”
The PND does offer a richer navigation experience than a phone, as the screen is wider and GPS systems have turn-by-turn navigation. Goldstuck says GPS will have to focus on its role in niche applications and developing software in order to compete.
Looking ahead
Garmin is already innovating to add value to its PNDs in order to compete with cellphones.
Richard Fearon, CEO of Avnic Holdings, Garmin's exclusive distributor in SA, expects mobile devices to surpass the handheld GPS in the next few years. However, he says the exact effect on the industry cannot be predicted yet.
PNDs are adapting to the challenge posed by the smartphone, Fearon says. He adds that handheld devices will have to offer consumers more value-added services, which mobile phones will not be able to do.
Fearon explains that the devices will soon be able to offer customers the ability to manage aspects such as their carbon footprint. In addition, vehicle management systems will also be available soon, and this is an area in which mobile phones cannot compete.
Not concerned
TomTom, however, is bullish about the future of PNDs. Joost Jetten, VP for sales in sub-Saharan Africa, says: “The mobile shake-up is not going to affect the GPS industry as much as previously thought.”
He explains that the PDN is becoming a market category in its own right, with retailers allocating more space to the devices. “If you go into retail stores now, it has a clear, prominent focus.”
Jetten says the category is being strengthened with the introduction of smartphones that have GPS capability. However, while this gives consumers more choice, he is confident the PDN offers a richer navigation experience for motorists. He adds that mobile phones could be taken up by pedestrians.
“If you put a GPS into a phone, it won't kill the market,” says Jetten. He explains that built-in cameras in mobile phones have not led to the demise of digital cameras, for example.
Tom Murray, TomTom VP of marketing for the US, is confident the PND market is not dead. “We believe that PND volume will grow 10% in 2010,” he says.
Looking at the growth of the smartphone, Murray believes there is no cannibalisation happening. He also believes PNDs still have a number of advantages compared to smartphones in term of usability, such as screen size and battery life.
Growing market
Navteq, a global provider of digital map, traffic and location data that enables navigation and location-based platforms around the world, says navigation is growing in leaps and bounds.
Research from the company indicates consumer experience with navigation is double what it was just a few years ago; but even in mature markets it has reached only around 50%.
Its 2009 Tracking Study revealed that 48% of respondents in the US said they had used navigation, up from 22% in 2006. Another 48% of respondents were familiar with navigation, but had never used it.
For Europe, the same study showed that in UK, France and Germany - the three most mature markets - just over 50% had used navigation, up from 26% in 2006. Another 41% were familiar with navigation, but had not used it.
Navteq also found that, globally, consumers have the most experience with portable devices. It says their use of navigation through an in-car system or mobile device is at lower levels.
Goldstuck says international trends towards navigation will spill over into SA. “Just as people today wonder how they ever survived without a cellphone, they will wonder how they ever survived without a map on their cellphone.”
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