With Maps Navigation, Google Puts Dedicated GPS Makers on a Road to Nowhere
by John Paczkowski
Posted on October 29, 2009 at 3:00 AM PT
Google is moving into your market.
For tech companies, few words are more frightening, and yesterday we saw why. The mere announcement of Google Maps Navigation sent shares of established GPS device makers like Garmin (GRMN) and TomTom into an ugly downward spiral.
Shares of Garmin lost 16 percent of their value and shares of TomTom plummeted more than 20 percent to a new 52-week low. This, despite the fact that Google’s (GOOG) new turn-by-turn mapping service is currently only available for Android 2.0 smart phones like the Droid from Motorola (MOT).
Clearly, investors already see where this is headed. Who will pay for a Garmin or TomTom unit when they’ve got an Internet-connected smart phone that offers turn-by-turn voice guidance for free? It might be a bit slow coming out of the gate given the current paucity of Android-based smart phones, but once more handsets arrive at market, Google Maps Navigation will undoubtedly have a significant impact on sales of dedicated GPS units.
And if Google brings the service to Apple’s (AAPL) iPhone, as the company hopes to, it’s going to be even worse.
“With this product, Google injects itself into a new market and has the potential to cause serious pain for the existing players, like Garmin and TomTom, while giving potential customers one more solid reason to switch to a Google-powered phone,” said Gabriel Consulting Group analyst Dan Olds. “It’s a lot easier to justify the switch to a new device if it takes the place of two devices, like a phone and a navigation device, and if it does the job better.”
Comments
This is good news for consumers. I just hope that its location finder is more accurate than Google maps on my macbook, which is routinely off by a mile-literally
Posted by David Owens at October 29th, 2009 at 7:11 amVerizon has had a GPS via cell phone option for sometime and it didn’t collapse the GPS market. I doubt Google will either.
Posted by David Lewis at October 29th, 2009 at 7:53 am@David Lewis: It’s not GPS that’s the topic … it’s the navigation, yo.
Posted by Alexis Deley at October 29th, 2009 at 8:16 amGoogle Maps on my two Sprint cell phones can often tell me which lane of traffic I am in. There must be something seriously wrong with your MacBook, DO. Their congestion notification on secondary roads is often right-on as well. It works so well I use it instead of the turn-by-turn app that I have. The new Google app will dominate the market because it has more features than dedicated GPS units (can you say Street View) and doesn’t cost the extra 10-15/month that the current Sprint/Verizon apps cost. Dedicated GPS makers will go the way that paid-webmail services went when Gmail launched. You just can’t compete with better and free.
Posted by Tim Smith at October 29th, 2009 at 8:30 am