GPS Navigation Companies Face New, Powerful Competitors

Garmin, TomTom Slash Prices Amid Google Threat (BusinessWeek)

GPS NavigationIf five years ago you were sitting in a marketing strategy meeting at one of the leading companies in the GPS navigation device business and you were asked to identify who the key competitors would be in five years, it is unlikely the names Google and Apple would be at the top of the list.  But today those are the names that give the GPS navigation companies the chills.

Of course, the rise of these new competitors is driven by the evolution occurring in the use of mobile devices for a wide array of purposes.  This has attracted many competitors of which Google and Apple are potentially the most dominant.  And this development is forcing traditional GPS navigation companies to change their marketing strategies including being more aggressive with prices.  Additionally, these companies look to compete against the new threats by introducing applications that run on smartphones, such as apps with turn-by-turn navigation available in Apple’s Apps store.

However, what the GPS navigation companies are losing is control of the physical product, that is, selling the device itself.  Because of this GPS navigation companies find themselves competing against a large number of software companies with some selling the software at very low rates or, in the case of Google, providing it as a free built-in application.

This will be an interesting market to watch and is a good example of how companies often never know where the competitors of the future may be coming from.

Garmin gets about 66% of its sales from PNDs. It will struggle to compete in a market where consumers can get navigation software for next to nothing.

What new features could GPS navigation companies add that may offer advantages over GPS products provided by Google and Apple?

Image by Jimmy_Joe

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