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A Three-Way Battle over Navigation

August 27, 2008

Cell phone manufacturers, PND vendors, and carmakers are vying to provide the platform of choice for the technology.


CAMBRIDGE, MA /BUSINESS WIRE/ -- Remember the PDA, the personal digital assistant that was literally held out as the ultimate in portable technology? Even as PDAs fade from the technology horizon, another currently hot "P" device—the PND, or personal navigation device—may soon follow, says an MIT Sloan School of Management expert on business strategy, technology, and innovation.

PND products, such as Tom Tom and Garmin, may remain popular for a few years, "but life is getting tough very quickly" for PND makers, according to MIT Sloan Senior Lecturer Michael A. M. Davies. PNDs face a growing challenge not only from cell phones, which are increasingly equipped with high-end navigation programs, but from a less obvious competitor—automobile makers. As software expands the capabilities of PND's, car manufacturers are in a unique position to make their use both practical and safe, he says.

"Navigation is about much more than just getting from Point A to Point B," says Davies. "It now involves finding the cheapest gas, the nearest coffee, and even social networking. As we confront drivers with all this new information, how it is presented becomes really critical. In a car, the blue screen of death really can be a screen of death. Although innovation in electronics has always been much faster in consumer electronics than in cars, Davies expects automobile vendors will soon recognize the opportunity and quickly catch up and possibly even win the navigation device war."

Some European carmakers are already marrying navigation options with safety requirements. "With some high-end cars, if you are braking hard while an incoming call comes to your mobile phone, the car will not put the call through until you have the vehicle under control," says Davies. "You don't want to have the world's worst backseat driver spouting directions in the middle of a scary maneuver, so the car's sensors will tell the navigation device, "Oops, slippery road here. Don't say anything."

Davies notes that the PND battle, like many fierce fights in communications and consumer electronics, now centers on software, not hardware. "The hardware is available off the shelf, but the issue is how to make sense of it. That's largely a software and, increasingly, a connectivity problem." In response, Microsoft, for example, recently unveiled a dedicated version of Windows to support PNDs, such as Garmin. Google has launched Android, which supports sophisticated, location-based services. "Android can be set to let you know when you're near a friend," notes Davies. "And I have a bet that within five years, at least one American-made car will ship with a dedicated navigation button to find the closest Starbucks."

Davies wonders whether PND makers "will be able to spot a market turning point before it arrives. Right now, things look great for them, but that trend will reverse dramatically," he explains. "The three-way battle between them, cell phone makers and car vendors is already underway. And don't count out the car makers."


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