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Will A Free Google GPS Sink The Navigation Industry?

Greg Sterling on October 26, 2009 at 1:03 pm

Lots of companies make a good living from hardware and software GPS navigation systems. In the US carriers such as Verizon and Sprint and personal navigation device (PND) makers such as TomTom, Garmin, Magellan, among others, earn device and subscription revenues from turn-by-turn routing and directions and points of interest directories.

There are a number of data providers and suppliers that support this mobile industry segment as well. That vendor group includes Networks in Motion and Nokia’s NAVTEQ, among others. MapQuest itself also offers a subscription-based navigation product.

Consequently there are lots of people who stand to lose if the rumor of Google producing a free navigation app, with turn-by-turn directions, turns out to be true. According to a Forbes article late last week:

Some location-based service providers speculate that mobile navigation is the next logical step for Google. The market, though narrow, is lucrative. Users typically pay monthly subscription fees of $5 to $10, making it one of the most profitable types of mobile content.

Google, which generally gives its software away for free and recoups its investment through advertising, would likely sell ads within the navigation application rather than charge users, experts say. The ads could be particularly valuable because the program would know users’ precise locations and destinations, allowing advertisers to pinpoint specific kinds of consumers.

The logic of the article is sound. Google certainly has the technical capabilities to create a navigation app, and might even make it a central part of the Android offering. There would offer additional search/ad inventory to fill and it would probably be a hit among consumer-users.

While consumer survey data suggest a reasonable number of consumers have bought stand-alone GPS devices or PND products the entire market is under threat from smartphones, which increasingly offer strong mapping and directions capabilities for free. Indeed, TomTom recently developed an iPhone app ($99) and related car mount to respond to this consumer shift toward smartphones.

We’ll see: a) if Google does release such an app or capability and b) whether it’s competitive with the other nav devices/systems in the market currently. But even if it’s not quite as good as one of the stand-alone offerings free is a fairly persuasive price point.

In a related vein a company called Glympse offers a personal locator service for smartphones, which is free and could equally contribute to the undermining of subscription-based friend finder/locator services offered by the carriers.

About The Author

Greg Sterling

Greg Sterling is a Contributing Editor at Search Engine Land. He writes a personal blog, Screenwerk, about connecting the dots between digital media and real-world consumer behavior. He is also VP of Strategy and Insights for the Local Search Association. Follow him on Twitter or find him at Google+.