GPS manufacturers tout software features

Suzanne Choney • E-mail

Road warriors love their GPS devices. Sales of the units have doubled each year since 2006, when more affordable portable navigation devices reached an economic tipping point. Now GPS units, which used to start at about $500, are between $200 and $300 for entry-level models.

The market is an intensely competitive one, even more so now with an increasing number of GPS-capable cell phones and consumers who are tightening their spending. GPS manufacturers are working to distinguish their units by offering software features for tasks like changing lanes and smarter routing to avoid traffic.

“The nice ‘gee-whiz’ hardware features are all great, but if you don’t tie them together with a great customer experience, they end up just being very techie devices, and not really appealing to the mainstream driver,” said Mike Wagner, director of product marketing for Magellan, the third-largest seller of portable navigation devices in the United States, behind Garmin and TomTom.

TomTom prides itself on its “software and user interface that is very intuitive, easy to use,” said Tom Murray, vice president of marketing development for the Netherlands-based company. 

“We like to say with a TomTom, there’s no manual required — even though we put one in the box.”

Garmin spokeswoman Carly Baltes says much the same thing: “Right out of the box, our flagship line of nuvi navigators are ready to go.”

As popular as GPS has become for vehicles, it still has customers to win over, particularly in the United States, where “only about 14 percent of drivers have GPS devices,” said Wagner of Magellan. 

Research firm Canalys said in a recent report that “the demand for personal navigation continues to grow,” and that shipments of portable navigation devices in the United States nearly doubled in the second quarter of this year, compared to the same time last year.

The market is “showing huge growth in terms of units sold, but this is coming at a price,” said Chris Jones, the firm’s principal analyst said in the report.

“Price-cutting has left several vendors struggling to turn a profit, and the economic climate isn’t helping. Meanwhile they have to continue to finance research and development to ensure they have the right feature set to attract future new buyers and those who will soon be considering upgrading from the systems they already have.”

Dash The Dash Express ($300) combines GPS with Internet access. It requires a monthly service fee, with plans starting at $9.99 a month.

A newcomer to the field, Dash, is making inroads with its $300 GPS Internet-connected unit, the Dash Express. It carries a $12.99 monthly charge for Internet service. Dash also offers other Internet plans, with the least expensive being $9.99 a month for customers who pre-pay $239.76 for two years’ service.

The three GPS “bigs” are tracking Dash’s success.

“Although we’re watching that as a technology for the future, we don’t think right now it’s meant for the mainstream; it’s really quite a niche,” said Wagner of Magellan.

In Europe, where TomTom dominates the GPS market, its newly released TomTom GO 940 lets drivers use Google for local searches for “real-time information” about traffic and weather, Murray said.

“Connectivity is something people have been anticipating in the industry,” he said. “It’s a natural extension of where we go with our products.” It’s not known when that service will be available in the United States.

GPS screens generally come in 3.5-, 4.3- and pricier 5-inch sizes. There are alsoand 7-inch displays sizes are available that also do double duty as a screen for DVDs and games . screens.

“We’ve tested 7-inch screens, but at that point, it actually takes up too much of your windshield space, and we don’t think it’s as safe as it should be,” said Wagner of Magellan. Plus, he adds, “You don’t want a big old TV sitting on your dashboard.”

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