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Mike Dobson of TeleMapics on Local Search and All Things Geospatial

Google’s Nav-O-Matic Finally Arrives

October 30th, 2009 by MDob

As the entire world now knows, Google has introduced a navigation package; I guess that literally is yesterday’s news. Today’s news was the TomTom and Garmin stocks were hammered as a result of the Google news, both dropping double digits, although TomTom’s warning about falling prices for PNDs contributed to the plummet of both stocks. Many news sources indicated that they felt that the PND market may be in a terminal decline. I suspect this is somewhat of an overreaction.

The turn-by-turn navigation market is certainly one that will continue to grow in terms of user uptake, but one does have to wonder about revenue growth. As I am sure you noted, Google’s navigation package will be priced at a very compelling $0.00, finally something even TeleMapics can afford! Of course, what’s good for me in the short run may not be good for me in the long run – but more about that later.

Google’s move into navigation is being based on a three-fold (at least) strategy. First, they want to ensure a competitive position for cellular phones provisioned with Android. Second they want to give Nokia a “whuppen” while giving Apple something else to think about. Perhaps more important than the other two, Google realizes that egocentric spatial search harnessed by applications capable of delivering the true richness of geospatial data to cellular phones will become one of the main engines for Google’s amazing advertising revenue machine.

For those of you wondering “What’s egocentric spatial search” – you don’t know how long I have been waiting for you to ask. All things wireless (and perhaps all things informational) are destined for greatness only if they cater to the thought “It’s about me”. Yes, the future of advertising and services is about “ME”. It’s about things around “ME”, how I can get to them or they can be brought to “ME”. We now live in an egocentric world where many consumers feel that there is no one who has more to accomplish in less time than “ME” and these folks are quite reasonably asking their suppliers “So what are you going to do to help “ME” with my problems?.

I suspect you have found the last few sentences somewhat obnoxious. Get used to it. Marketing today is about personalization, communication is about personalization and so is product development. People want things the way they want them and free is a good way to start – something that Google realized quite some time ago. Google does not want your money directly, it wants to woo you with free services and it will help you get things done by providing information containing advertising targeted at where you are and what you likely want to accomplish at that location. As juicy as this all is, however, it is not the point of this blog

It appears that the only ones who will be making direct profits from the Google Navigation product are the networks who will sell both the phones and the data packages to support them and possibly the phone manufacturers, such as Motorola. I suppose it is prudent to wonder if those data plans will increase in price to reflect the amazing rate at which new data gobbling applications are being introduced. Perhaps, “all-you-can-eat (AYCE)” data plans will become a thing of the past.

Those of you who have tried to use your iPhones anywhere near the Financial District in New York City know how the system works when phones that gobble data try to connect to a resource constrained infrastructure (aren’t they all?). Most of my friends in NYC have given up trying to use their iPhones, except at night, when they might be able to squeeze a call or two out of the network before they get disconnected. If the wireless carriers have to upgrade their infrastructures to service data intensive applications, how long do you think data plans will be all-you-can eat or available at the same bargain prices for which they are available today?

One of my acquaintances from Europe (John Craig of Intermap), raised the issue that nothing’s free if you are traveling and your cell phone is roaming. He is located in Germany and noted that even the “AYCE” plans do not allow roaming in other countries. He concluded that using the Google Navigation service could be prohibitively expense for business travelers in Europe who those who commonly travel between countries. I have heard the horror stories of people based in the U.S. who have taken their iPhones to Canada or Europe, forgot to turn on airline mode, forgot to turn off international roaming, forgot to disable email and the auto check function for email and received bills approaching a thousand dollars for a few days on the road. Ouch. Guess even free things like Google Navigation aren’t really free. But that isn’t the main point I am interested in either.

There may be a hidden cost in the potential success of the Google Navigation application and the one of interest to me is related to the influence that Google’s map-based applications will have on the other providers of map and navigation data and competition in that market. If, as many writers have suggested, PNDs are in a death spiral, where does that leave TeleAtlas? If Android becomes more popular than Nokia’s offerings, where does the leave NAVTEQ?

It is clear that neither NAVTEQ nor TeleAtlas ever made significant revenues from licensing their databases to Google, Yahoo, Microsoft of anyone else in the online world, so losing the online market is not the biggest financial setback that either provider could experience. In fact, the largest proportion of NAVTEQ’s revenues depends on in-car systems ranging from integrated in-dash navigation systems to Advanced Driver Assistance Systems. However, the company also benefits from a reasonable revenue stream from licensing their data to PND manufacturers and providers of cell phone-based navigation systems. If Google’s Android and its navigation software are a huge success Navteq and TeleAtlas may be in for a world of hurt.

Yes, we can all argue about how satisfying consumers will find navigation services delivered from a “cloud” across the spotty coverage of wireless networks to devices containing inadequate GPS systems. But I think spending time on that argument is wasteful. Communications technology will improve, enhanced GPS chips will evolve and in time, phone based systems will win the market.

On the other hand, it is unlikely that Google will ever play a role in the high accuracy world of 3D Road Data for ADASEM (Advanced Driver Assistance Systems and Energy Management), which may provide a significant future revenue stream for companies capable of providing high accuracy spatial databases. ADASEM has been an interest of mine for some time and I am headed to Munich for Telematics Update where I will be chairing a panel discussion on “3D Road Geometry Requirements and Advanced Automotive Applications” that is being hosted by Intermap Technologies. I am sure I will learn a lot and I intend to use the conference to see where the future of mapping (at least the one that isn’t Google) might be headed. Of course, I would be delighted to see you there.

By the way, I am departing for Europe on Sunday and will be taking some personal time in Austria b before heading to Munich and the conference. After the conference, I will be touring parts of Germany. So, yes, I will be playing and it might be hard to squeak out a blog or two – but I will do my best, because I want to finish up what I have started here. In addition, I think we need to look at the User Generated Content thing again and try and figure out how much Google is going to depend on it for map updating. And if not map updating, how much is Google going to depend on conflation? There are no warehouses full of digitizing tables in GoogleLand – if it can’t be done algorithmically, it’s just not worth doing – and it probably doesn’t earn you any promotion points if you are software engineer who suggest a labor intensive solution to map updating. Ah, it’s a new world for mapping – isn’t it?

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Posted in ADAS, Garmin, Google, map updating, Mapping, Mike Dobson, Navteq, Nokia, Personal Navigation, PNDs, routing and navigation, TeleAtlas, TomTom


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