Wednesday, July 8, 2009

As Technology Converges, What Should the Strategy be for Point Technology like GPS?

Convergence has been a hot technology topic for a long time. Today's New York Times takes a look at the downside of convergence for GPS manufacturers, in "Sending GPS Devices the Way of the Tape Deck?"

Smartphones, especially that particular one that promotes itself by saying "there's an app for that," is where so much technology is converging. (It hasn't been easy finding a simple cellphone that only makes calls for several years.)

And while that's good news for users by reducing the number of devices we must carry, that's not the case for some of the technology providers.

GPS, for example, is now included in many smartphones, decreases sales of dedicated GPS units. No doubt the dedicated GPS units do some things much better than the GPS on your iPhone such route planning , identifying points of interests, remembering key addresses, and working when outside of cell coverage. Dedicated GPS units can also be much faster than GPS-enabled phones. Plus, you can carry on a conversation while also looking at your map, which you can't do with a smartphone and directions.

Still, it seems inevitable that sales of GPS devices will decrease -- that is GPS for driving. Specialized GPS devices for hiking/offroad and boating will continue as a niche play.

The challenge for TomTom and Garmin, two of the best known GPS manufacturers, is how to survive.

While I prefer Garmin's Nuvi line, I'd have to say that Tom-Tom's strategy appears to be superior to Garmin's.

According to the Times, "
TomTom, based in Amsterdam, recently announced that it would introduce a portable navigation application for the iPhone this summer that would feature turn-by-turn directions and audio prompts. Unlike existing GPS apps for the iPhone, TomTom intends to charge a one-time flat fee rather than require users to pay a monthly subscription fee.'It’s the manifestation of our strategy to make TomTom available across different platforms, including the smartphone,' said Tom Murray, the company’s vice president for market development. "

According to the Times, Garmin "is taking a different approach...(and) plans to release a combination navigational device and cellphone called the Nuviphone later this year." The problem: "The company’s bet — that it can beat established smartphone makers like R.I.M., Apple, Palm and HTC at their own game — is a risky one at best, said Julien Blin, principal analyst at JBB Research, who follows the industry."

I totally agree with Julien Blin -- Garmin knows how to make cool devices, but smartphones are difficult, and require additional skillsets than what Garmin has shown previously. It's going to be a tough sell.

We see more technology companies developing technology components to make their apps available cross-platform. Our client, Avistar, recently announced a new videoconferencing solution, the C3 Media Engine, that does just that -- allows developers to embed videoconferencing capability into their applications. Spreadsheets, word processing documents, presentations all can easily have a button that enables you to communicate and collaborate with clients, colleagues, etc. from within the app. No switching back and forth from one app to another to the videoscreen.

I don't usually mention clients in this blog, but I think that smart companies are adapting now to imminent convergence. I think TomTom is making the right bet, and so are companies like Avistar.

What do you think smartphone convergence will look like?

No comments: