43 thoughts on “Why the GPS Party Is About to End”

  1. I’ve never seen the real utility of a GPS device for the general public – sure, they’re great for those who have to travel to unknowns a lot but those types are down in the noise level. For the rest of us out here we do 99.999% of our travels over well-worn VERY familiar territory where a GPS device has GOT to be the most redundant and useless info source around.

    Watching rush-hour commuters who are taking the exact same route to work they take 250 times a year in their 4-wheel-drive SUVs that never see mud eagerly staring at their dash mount GPS devices is a constant source of amusement.

    And, of course and as noted in the article, places like Google offer Google Maps with cell-tower triangulation so even when that 0.001% GPS-need opportunity arises for the general public a quick glance at one’s cell phone satisfies the need to know where one is.

  2. Sirf StarIII chipsets are what brings the ultra-high resolution to modern GPS devices, so it’s sort of worrisome to see them announce that things aren’t going well.

    You’re probably right about seeing the personal navigation device market being killed by the mobile phone, but they will still require Sirf chipsets.

    The previous commenter is right – most people don’t need a GPS. It’s a luxury that provides some utility – maybe. It’s sort of the chicken and the egg thing – location based services will drive GPS purchases but that won’t happen until more people buy GPS devices.

  3. I don’t think this is a harbinger of ills in the GPS world. The majority of SiRF’s malaise stems from its failed efforts in mobile TV. If you could strip that out of this news, I believe the fundamental’s of its GPS business are ok, if not great. Of course there is always downward pressure on prices, but since when is this not the case for a silicon based industry?

  4. I’m not convinced about the phone as a GPS device… especially whilst driving AND talking on the phone at the same time. Sure that’s a bad habit in and of itself, but many if not most folks have their phone at their ear when driving. Since the screen is pointing at your ear at that time, and audio directions would interfere with the phone conversation, having the integrated GPS is really not practical…

  5. Om,

    The GPS,mobile, and map technology industries are converging. I don’t think that GPS as we know it will come to an end. What I think is likely to happen (in fact i’ve expected it for some time) is that the core technologies behind GPS (of which Garmin is market leader with the largest patent portfolio) and mapping (Navteq, Telenav, etc.) will move into the Cloud. This convergence and migration will result in GPS services delivered to devices (cell phones, MID’s, and MP3 players) and vehicles as needed by the consumer. The primary consumer interface will be the browser.

    Sirf Technologies is seeing weakening demand for devices which need their chips, whereas Garmin and the rest of the GPS technology companies are seeing an increase in demand for GPS services.

    I don’t think the GPS party is over, I think it is about to rage. 🙂

  6. Oh, this makes me sad. I am what you could call “Directionally Challenged”, which basically means I can’t find my way out of the parking lot half the time.

    I rely on my GPS system. I have a GPS in my phone but I never use it. Too small and I don’t have a place to mount it on the dashboard and it doesn’t talk to me like my Garmin does.

    Or did. Last weekend my Brand New Garmin was stolen out of our car. So it will be a few weeks of going around in circles until I can get it replaced.

  7. @DB, with new laws many more people are using BT headsets than before, so as long as the phone can make it easy to multitask it wouldn’t be an issue to continue a call while also using navigation on the phone. In fact, even many standalone units will display Caller ID information via BT when a call is received on your phone.

    But it’s definitely going to add to the number of distractions while driving, and it’s already clear that laws like no cellphones while driving are not very useful when there’s no enforcement (not to mention their questionable effect in the first place…using headsets doesn’t change the fact that you’re having a conversation which some people can handle while driving and some can’t)

    I can definitely see people using their cellphones for GPS navigation, as I currently do that with my Moto Q9C through Sprint’s Navigation service. And I’m sure the carriers love the subscription model.

  8. I am convinced as well that the mobile phones will dominate this field. For one they are smaller and easy to carry and they are also easier to use if you need to walk places on foot.

  9. I don’t see a phone, no matter how sophisticated, taking the place of a GPS system for the frequent user. For those who take 1 trip a year and can’t justify the GPS price tag, maybe. I’ve had my GPS for almost a year and what has surprised me the most is how much more useful it is than I ever imagined. Sure it’s great for trips to places I’ve never been before, but what a lot of people don’t realize is it really is useful for every day situations. It makes it very convenient to get around traffic jams when that route that you’re familiar with is impassable. Or when you’re on a side of town that you wouldn’t get lost in, but suddenly need to find the nearest ATM, bank, McDonalds, Walmart, etc. that you’ve never been to.

    Points of interest are probably the biggest feature that makes a GPS worth having for someone who doesn’t travel constantly. So when you see me on the way home from work taking the same route I always take and I’m staring at my GPS don’t assume I’m an idiot. I may just be looking for the nearest bank to get to before they close or a restaurant that I’ve never been to or a way around that wreck that you can’t see yet.

  10. I believe PND’s (Personal or Private Navigation Devices) have many benefits over cell phones. In most cases, GPS on cell phones cost $10.00 per month; HOWEVER, to use that service, you need “data” capabilities on your phone which can cost up to $40.00 per month. I for one, have no desire to surf the web on a 1.5″ screen, therefore, paying $250.00 (one time charge) seems to be a much better investment.

  11. Agreed with Curtis – this party is about to rage, even if some of the guests may wind up crashing early.

    People who haven’t used GPS before are usually amazed at how useful it is when they first see it in action. Often, it exposes how inefficient we are in our driving habits (driving out of our way to get back to familiar routes, when shortcuts could save us lots), and how timid (I would drive there, but I never know where to park).

    We already have live traffic updates being fed into GPS systems. Soon we will see live integration of public transit data (When will the bus get here? Is there another route that will get me across town faster?), parking lot updates (which one still has spaces available?) and even restaurant data (where is the closest Italian place with an open table for 4?).

  12. I just wanted on the comment made about having to have data services for the GPS service. You do not have to have data services on your phone for this to work. I have it for my wife, and we pay the $9.99 / month. That’s it!

  13. Its amazing to see how many people buy GPS units (i work CE retail). It seems like a rite of passage for new-to-the-area folks.

    i personally believe in getting lost on purpose to find your way around. One tank of gas in my truck is still less than a 200-800 unit.

  14. In the short-term, sales portable navigation devices will slow down, and may even be cannibalized by mobile phones with GPS. But I doubt mobile phones will replace OEM installed car navigation.

    As for those who write about car navigation as being redundant – no way. You may think you drive to places you’ve driven before, but as more car nav systems get connected to the Internet, much like the Dash.net device as well as what BMW offers in their connected car nav, the Internet generation wants more live, up-to-date, real time information about everything.

  15. My wife and I love our Garmin GPS and I am always telling friends they have to get one. And I walk to work (We use it only on trips out of town – vacations, family etc.). If there is a slow down, its due to the post-christmas market, not because consumers don’t want these things. They are awesome.

    The phone-as-gps convergence has a way to go. The qualities people want in a GPS device: large screen, touch-screen, voice prompt, easy interface is opposite what people want in a phone: small, portable etc. The only phone that would even come close to working right now would be the iPhone and you would still need a mount for the dash, an external GPS, power adapter etc. Its easier to just get a Garmin and leave it in the car.

  16. @Daniel: “The only phone that would even come close to working right now would be the iPhone…Its easier to just get a Garmin and leave it in the car.”

    Not to mention cheaper than an iphone 🙂

  17. I rely on my iPhone to get around the city – walking, driving, bus – in a way that a Garmin or TomTom couldn’t. But, my parents couldn’t live without their Garmin to get around the always under construction roads of Boston. My parents are a little more tech-savvy than most, so it’s possible that the industry may just be experiencing a awareness lull between audiences.

  18. This SiRF story has gotten way overblown in sizing up the GPS industry. Did anyone ever think of the scenario within a classic value chain? Is it possible that SiRF could not provide the level of differentiation to prevent its customers from jumping ship and buying from their competitors? Many of the big GPS players – that are listed in your article – are sourcing from other vendors now. So, you jumped too early on this one. Sure, a slowdown is likely at some point, but your strong correlation between SiRF’s recent regression and the strength of the industry is completely off.

    Nevermind that LBS is the future of the mobile world…

  19. Michael is correct — most manufacturers are making their own high-sensitivity chips or sourcing them from other, lower cost providers. So using SiRF as a harbinger of the end of GPS is way off base… the market has a lot of room to grow.

  20. I agree that this industry has a long way to go yet. Anecdotes tell me while the early adopter phase is certainly over, the growth ahead will be astounding. I see this more like an ipod chip supplier losing the work to another company, bad for Sirf, absolutely not a canary in the coal mine for Garmin.

    It is time for Garmin to rise from its ashes. They already have taken this one out back for a brutal pummeling. Just like ipods, people are going to keep buying these PNDs long after you would logically suspect we were near a point of saturation. Glad to see I am not alone in this thinking.

  21. This whole idea that GPS is dead is crazy. If that would have been the case with the cell phone industry where once you have one yu’re done buying we’d all still have bag phones. But that wasn’t the case it’s all about new technology and that will be the case with PND’s they used to do a bread crumb trail with the early ones and no map, no road, no turn by turn beeps, no voice turn by turn, and all that has been developed over a short 10 years. Now comes talk to your garmin tell it you want to eat mexican and it will show all in your area. Want to google for a nic-nac shop in St. Cloud, Mn. go for it. want to avoid road construction no problem. In my opinion we are just getting started in GPS and Garmin is the leader in this game. 50% market share. some day GPS will replace Air Traffic Control and Drive your car. May sound far fetched but just think where it was 5-10 years ago do a timeline on it and then you’ll have an idea how early we are in this market. jmho

  22. Agree with all the pro GPS people – Scionguy, Daniel, et el.

    A GPS device is something that you dont miss much until you have it, and than you cant live without it. Sort of like the first time I got a cell phone. For a decent length of time I kept telling myself I did not really need one – albeit this was many many years ago.

    The utility is tremendous. Even if you do not travel. And if you do travel at all, it is an indispensable piece of equipment.

    As for cell phone based GPS – I dont think that is a viable option at all. The screen is too small, the UI is not meant to do GPS things, and all the other good reasons that others pointed out.

  23. Quite frankly, the people who put these kind of articles out are complete idiots and know absolutely nothing about GPS. The analysts and authors telling you GPS is done, or sales are decreasing, or cell phones will take over, are totally wrong. Stop reading the BS and do your own research instead of relying on some moron telling you what he thinks.

    Sadly, the only positive thing to say about this article is that he didn’t use some lame cliche headline like, “Garmin is lost” or “GPS trying to find its way.” It’s not clever people- enough with the stupid headlines, really.

  24. All the haters need to check out Garmin’s web-site to see how they’re selling pure software for Blackberries, Nokia and now Samsung. Garmin also has a growing fleet management line of products to assist businesses. Nuviphone, dedicated PNDs, Avionics, Marine, hiking/fishing, pet monitoring – the diversity of their product offerings is amazing. They are poised to make big money off those who want dedicated PNDs AND those who want smart/cell phone GPS. Buy the stock now while the media herd universally adopts the Jim Cramer universal gadget theory of Garmin’s demise. The fools don’t understand Garmin’s business and spend too much time with urban techno yuppies who think nothing of plunking down $800 every year on the latest unigadget. The rest of us prefer more cost effective technology solutions that are user friendly and tailored to our needs.

  25. PDAs did not ‘cannibalize’ computer sales. MP3-capability on phones did not cannibalize MP3 players. Navigation cellphone apps will not cannibalize on PNDs. If you have a need for a PND, you also have a need for a decent screen, decent functionality and decent loud speaker. Navigation via cell phone is a novelty. -Fun and great to have, -if you don’t have to pay too much extra for the phone, but not a solid navigation tool.

  26. M is right. I have the misfortune of often having to speak to stock analysts at trade shows about GPS. These people simply don’t understand GPS and its applications. Sell Garmin at your peril.

  27. if you think sirf is the only company supplying garmin with gps chipsets, you haven’t been paying enough attention.

  28. Om, it doesn’t look like the “GPS Party Is About to End” after reading Best Buy’s earnings report:

    “Consumer electronics, which represented 42 percent of fourth-quarter revenue, declined 4.6 percent on a comparable store sales basis. Within consumer electronics, a low-double-digit comparable store sales increase in flat-panel TVs and a triple-digit increase in GPS products led the revenue category.”

    “…the company’s revenue mix continued to reflect a shift toward higher-ticket items, such as video gaming consoles, notebook computers, flat-panel TVs and GPS devices.”

    “Revenue growth of 9 percent from new store openings and comparable store sales gains from notebook computers, GPS devices, video-gaming, home theater and mobile phones. These gains are expected to be partially offset by comparable store sales declines in music and DVDs.”

    Does triple-digit growth signify a slowdown?

  29. I bought this Magellan GPS system to aid in my in-town and away travels. It’s user friendly and fairly intuitive to use. The speaker was decent. I didn’t find the issues with the volume others experienced.

    What I would change to make it better is a free subscription to live traffic update. Also, regarding the traffic update I found that it offered me detours for traffic that had already dissipated. That was a bit troubling.
    The only other issue I had was the bluetooth volume. Now that was EXTREMELY LOW. I could barely hear anything and that was sitting still!

    Overall, a good quality product for the money.

  30. My Garmin GPS Unit has been a pleasure to use. Going to towns I have never been, long streets with many different names, and now using a cell phone? What happens when you are in a remote area that has no cellphone coverage this happens all over, not in just the less populated states but in the more populated states such as Central Florida. The GPS uses satellites, the cellphones use towers. Now what happens when all these towers get blown over by winds from a tornado or hurricane or shaking to the ground? Wouldn’t you rather have somethng that is there and is stable?

    Long live GPS devices and stomp your phone out. Use it for real business and not to baby sit you as you drive home.

  31. I think it would not be right to dump GPS devices over phone
    devices with GPS.
    One of the reasons I believe is that as a navigational device
    it is safety issue in cars unless the automakers build it prior to selling vehicles which would take away the competitive models having it in the car pre installed is that it would be more expensive to change for individual users and relatively little choice of obtaining better models .

    The disadvantage since the user could not choose from other competitive or newer devices with better features since car companies do not change these features daily even if programmable just walk in and buy. Cell phones are great if you are walking but to use a hand held GPS poses safety risk in car issues as people have a tendency to hold phones in their hand and would not put it install the device hook in the car even if they had so it poses a hazard. Driving in one hand and losing emotion in a phone conversation.

    I like the ease being able to choose and have option of purchasing a new gps or model personally.

    However to integrate into a fun gizmo phone on the road is not my thing already people do too much weird stuff on the road like hitting brakes on the highway as happened to me more then once not to mention swaying in the lane or completely ignoring a green or red traffic signal
    The person ahead of me was so much affected by his personal phone conversation that they literally braked on the highway and another halting traffic while finishing his conversation with cars beeping. So in my humble opinion I don’t think having to do away with GPS devices is a good strategy over phone GPS unless there is some means of improving the way it can be used which people even play games on another distraction since u have to key in coordinates of gps while already driving with one hand having focus of attention elsewhere.
    Anyhow I don’t think the gps market should be done away with because of telephones.

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