Article: Will Google Kill the GPS Market?

Media Credit: Google

What do newspapers, music companies, and makers of portable navigation devices like TomTom and Garmin all have in common? They have the same problem — someone is willing to give their product away for free.

In the case of the first two, it has brought about the expectation that these goods and services ought to be free (which is part of the reason that newspapers around the country are failing and the U.S. is so deficient in quality journalism, but that’s another story). In the case of navigation devices, that expectation isn’t here yet, but the GPS and portable navigation device (PND) makers will need to act quickly to make sure it doesn’t happen.

This situation for PND makers comes from Google’s announcement today that they are going to include free navigation software in the forthcoming 2.0 version of their Android OS for mobile phones, which is expected to launch across many new phones in the coming months (starting with the Motorola Droid for Verizon). That’s a lot of phones that are going to have free GPS navigation software, but this by itself isn’t the scariest part for companies like Garmin, TomTom, and Magellan. It’s the (plausible) speculation that Google will shortly bring their software to all the other phone platforms on which Google Maps is already available, such as the iPhone, Windows Mobile, Symbian, and others. If people can get spoken turn by turn navigation on their phones for free — especially if they’re phones that they were already going to buy anyway — PND companies are going to have a hard time persuading people to dish out the cash to buy a dedicated navigation unit (or pay $99 for something like the TomTom software for the iPhone).

To make matters worse, the Google software looks pretty good. Great, actually. It’s still in beta, but it already incorporates a lot of features that PND companies charge premiums for, like text-to-speech (reading street names aloud), advising you which lane to be in, real-time traffic, and voice control. Plus, it includes data from Google’s satellite imagery and street view. You can see what the streets and terrain around your route actually look like (helpful for when you’re dealing with unmarked streets or unusual intersections), and it will show you each of your turns in street view so you know what the corner or off-ramp will look like before you get there. When you get to your destination, you can compare the street view image to what you’re actually seeing to make sure you are in the right place.

There is one major drawback to Google’s software. It doesn’t store all your maps on the device; instead, it downloads them as you go. This is fine as long as you have a good signal, but if you drive somewhere in the middle of nowhere without WiFi or a cellular signal, you could find yourself without directions. Google claims that the device will cache information on the device for the route you currently have programmed in, which should help if you’re driving through areas of intermittent or spotty coverage, but not if you’re in an extended coverage-less area. To be fair, most places people drive have cellular coverage, but PNDs and most dedicated GPS software have all of the maps and point of interest information on the device’s hard drive, so all you need to keep going is a GPS signal.

Google’s software is a game changer. It’s impossible to compete on price when your competition isn’t charging anything*. Suddenly, starting today, PND companies are going to have to work really hard — and possibly do something drastic — to stay in the game. Otherwise, the standalone GPS unit could go the way of the Palm Pilot, and Google will own yet another market.

*Google is planning to make money by advertising within their navigation software. Garmin or TomTom simply can’t hope to serve up ads like Google can, and this model further increases Google’s incentive to get their app on as many phones as possible.

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