Thursday, November 17, 2011

What's Next for the GPS?


by Patrick Negri

            In the late 1980’s the world was introduced to a not-so-new piece of technology. This was a personal global positioning system, more commonly known today as a GPS. Though used in military technology for many years, the regular person did not have such devices to use in their everyday lives. In 1990’s companies such as Garmin and TomTom exploded onto the scene and continued to grow through the decade. And through the turn of the century while constantly advancing their technology, these firms were able to retain large sums of revenue. The transportation industry was indeed changed forever. It looked as if Garmin and TomTom were going to be the top of the navigation business for many years to come, but then something happened.
      In the summer of 2007 a little company named Apple released a device that would again change the game forever. This, as you might have guessed, was the iPhone. Being sold under slogans such as “The internet in your pocket” and “Touching is Believing” the iPhone was the first mainstream “all in one” device. Along with this all in one device, comes a GPS. As the world of the smart phone grew and more and more apps were created, developers were able to use the GPS feature to their advantage. Creating apps such as Mapquest Mobile and AmAze GPS, developers have created a viable alternative, for smart phone owners, to a GPS system. This has limited growth opportunities for traditional navigation companies.
            Companies like Garmin and TomTom will have to play a new navigation game in a different way if they want to survive. They can re-position their value in their ability to provide reliable, safe and accurate directions very quickly to users. Up until now, it was all about their device. That was the key component, because you could not get directions in your car without it. Now smart phones, if they have not already, will deter people from spending hundreds of dollars on a device that does only one thing. Navigation companies need to understand their real strength comes from their intellectual capital, not their devices.
 Let's Get This Guy.
            One option for these companies is to take advantage of twitter. Navigation companies can create a twitter account that is reactive to their followers. Twitter users can tweet at navigation companies with their questions, and in return they will receive directions to get them to their destination. Navigation companies can take advantage of tweet ups by following traffic patterns and offering new routes to drivers stuck in traffic. Though this is an option for navigation companies, it will be difficult for them to turn this into revenue, and as any business professional will tell you, an idea is a good thing to have, but an idea that will make you money is a great thing to have.

So, what else can they do? Are there no other options? Fear not navigation company executives and shareholders! I have a solution. And this solution all boils down to you looking at your company, your external environment, and your competition and asking yourself “What’s Appening??”
            Companies like Garmin and TomTom need to create an app that will provide their service to users. I was shocked when I bought my first iPhone and the best option I have for a GPS app was Mapquest mobile. How could navigation companies not have gotten into this game before? At any rate, it is not too late for them to compete. With that said, for this to be successful they will have to enter what is now a little bit of a crowded market, but they do have one major advantage: A BRAND!! Everyone knows the names Garmin and TomTom. They are everywhere. In our cars, in our watches and, more recently, in our shoes! They can position it based on the idea that drivers cannot trust any one else's directions except theirs. New game, new way to play. Even though there are other GPS apps available, none have the reputation of large navigation companies such as Garmin and TomTom.
            All businesses have to remember that the car is not just a faster bicycle, and email is not a just a faster fax machine. As we move through what seems to be a never-ending trend of technological growth, the external environment will constantly challenge business owners. Navigation companies have to play new games and compete in new ways if they want to continue to outlast competition and stave off threats coming from new technologies and a shift in the way people interact with these technologies.


2 comments:

  1. You think revenue from apps is enough to keep them afloat?

    I think the key is partnering with car manufacturers with the goal that every car has a built in TomTom/Garmin system. Thoughts?

    ReplyDelete
  2. Agreed. It will be difficult for them to sustain revenue. They are already available in automobiles, maybe they can sign similar contracts with smartphones?

    ReplyDelete