November 30 2009
by Scott Johnson

Tom Tom and Garmin In Serious Trouble

Personal Navigation is being disrupted.  Garmin and Tom Tom, as their share prices show, are being Googled.  That is, their expensive consumer service is suddenly free from Google.  Can they survive?  There is a great deal of speculation about this in the press.  So I thought I would add mine, as I am an investor in Maptuit and Everyscape, have thought about this space a great deal, not to mention the acronym for my fund is NAV.

The answer is:  They are toast.  I wish I could see a way forward for them, but I just don’t.  The connected, open platform always destroys the single-purpose device.

I am particularly concerned for Garmin because of this quote:

“(Standalone devices) will still be an important way for consumers to get directions,” said Ted Gartner, a spokesman for Garmin, “We’re not going anywhere.”

Hmmm.  So, Ted, how many iPhone owners have purchased a Garmin device this year?  How many do you think you will sell to Droid owners?  What do you think everyone who might consider the purchase of a PND will be using for a handheld in 3 years?  Is it not true, then that your entire market will soon own a handheld device that makes your product obsolete?  I see no scenario where the buy-at-costco-give-as-gift standalone PND market is not cut in half in three years, and settles down around 10% in 6 years.

How might they evolve to survive? Tom Tom owns TeleAtlas & Nokia owns Navteq.  If those two collude, they could cut Google off.  But Google is acquiring its own data and will probably finish in a year or two, although they could get the major cities pretty quickly.  Next!

How about proprietary value-add services?  Roadside assistance, reservations and recommendations, better directions (Google’s are pretty bad) and the like?  Well, these are unconnected devices, and all of those are easily replicable on handhelds.  And with that, I am out of ideas.

Final score:  Open platforms 90, Garmin and Tom Tom 10.


November 30 2009
by NewAtlanticVentures

From the NAV Blog: Tom Tom and Garmin In Serious Trouble

December 1 2009
by Tim Rowe


And you forget to mention that Garmin and Tom Tom’s traffic data is way behind what can be offered on connected devices. The traffic information available through Google’s service is based on real-time data collected by analyzing the motion of ~20 million+ cell-phones (Sprint), with another 30 million from Verizon coming online soon, through Google’s traffic data partner. This has made Google’s traffic data is light-years ahead of the antiquated data that is sent over FM sideband to the previous-generation devices from Garmin and Tom Tom. Without becoming Internet-connected devices, Garmin and Tom Tom can’t compete. But becoming Internet-connected is very expensive to add to their device. By contrast, cell-phone users are already paying for that connectedness, and see the navigation as free.

December 28 2009
by Digital Cartographer

What is so hilarious about every person who has such faith in Google being able to create a navigable map database (in a year and a half even, which is what they are quoting), has no idea how Navteq has operated for over 15 years. We have driven every single tiny subdivision road in all the metro areas and many rural areas have been driven to 100% as well. As soon as Google stripped Teleatlas and Navteq data from its GIS, the results were ridiculous. In Tucson, they have the name of three major collector roads off of the I-10 misnamed, and misnamed DIFFERENTLY for several segments at a time. They are missing all the new interchange configurations that were finished this year in the city of Tucson (over 10), and last week, as a friend was asking me to show him my childhood home in Rochester, NY (using Google Maps), I saw that the road that has been named “Latta Rd” since I was 5 years old was named “CR-52”. “Latta Rd” is also a major collector road heading straight to the highway. There is no way using temp drivers with IMU cars can actually allow cartographers to enter navigable attributes correctly (legal and physical dividers/turn restrictions preventing turns from side roads, timed turn restrictions, corner addressing, and so on. The data they have is a joke and as was reported last week, one of the helpful “users” was charged with “editing with ill intent” by changing the addresses of all the competing florists in her city. I doubt she is the first person to think of this. When some time passes and people see how awful the Google data is (they are where Navteq was 12 years ago), the timing of their launch into the personal navigation market without Navteq or Teleatlas data is going to be the laughing stock of the industry. One last thing, I have an in-dash nav-system in my car and I would rather drive blindfolded than try to use my cell phone instead of the large screen provided with my in-dash system. Paaaleease!!

December 29 2009
by Scott Johnson

Digital Cartographer – Getting Googled means they give what you charge for away for free. So Google can afford to be wrong here and there, and still garner 90% market share. 90% of consumers will gleefully accept the free app that misses on occasion but mostly works and has a superior interface, and as TIm points out above, better traffic. The remaining 10% will care about the occasional database error you mention and insist on better data. Truckers, fleets, those who lose money when its wrong.

That said, I am predicting the demise of Garmin and Tom Tom in this post, not Navteq and TeleAtlas. Although those databases have just lost a large portion of the consumer market opportunity.

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