40pc of car owners want navigation technology


22 May 2006

Share on FacebookTweet about this on TwitterShare on LinkedInShare on Google+Pin on PinterestShare on RedditEmail this to someone

Share on FacebookTweet about this on TwitterShare on LinkedInShare on Google+Pin on PinterestShare on RedditEmail this to someone

In-car navigation system manufacturers must expand their value proposition or face commoditisation by 2010, Gartner has announced. While navigation has provided a major revenue opportunity for the car industry, increasing ubiquity of the systems and increasing competition threaten this lucrative market.

Navigagtion-system manufacturers must enhance their offerings to maintain prosperity, said Gartner research vice-president Thilo Koslowski.

Disruptive forces in the form of growing competition and technology advancements will ultimately lead to navigation applications losing their premium status and becoming ubiquitous at low price points over the next four years,” said Koslowski. “This will change consumer demand and requirements for navigation applications. For example, in the US 24pc of consumers interested in vehicle navigation would prefer a portable solution over an embedded one.”

Nearly 40pc of vehicle owners in Europe and the US want to add navigation functionality to the next new vehicle they are planning to buy — a significant market opportunity compared to 8pc and 20pc of US. and European consumers respectively who currently own embedded or portable navigation solutions.

However, consumers are struggling to find the right balance between price and value, especially when considering costly, factory-installed navigation systems which are likely to benefit providers of portable navigation solutions such as cell-phone based navigation.

To avoid the risks of profit erosion and commoditisation of traditional navigation applications and basic content (for example, map data), vehicle manufacturers and other market contenders will have to evolve navigation offerings beyond the traditional value proposition.

“The evolution of navigation technologies and applications will occur in three phases,” Koslowski said. “The first phase will focus on improving user interfaces and enhancing the functionality of navigation solutions, for example by adding predictive traffic information.

“The second phase will emphasise personalisation aspects such as the integration of vehicle navigation solutions with a user’s calendaring, time management and media applications.

“Finally, navigation systems will support legislative mandates for traffic management, taxation and real-time cost assessment such as calculating trip-related costs based on tolls, gas consumption, and pay-per-use insurance,” Koslowski added.

The value chain is still emerging but vehicle manufacturers, suppliers and portable navigation solution providers must collaborate with companies, governments and public institutions to develop a strong value proposition for next generation navigation applications.

By John Kennedy