Detailed system and semiconductor demand analysis for in-vehicle infotainment, telematics and vehicle-device connectivity features.

January 13, 2010 10:01 rlanctot
Motorola brought an impressive new connected portable navigation device to the Consumer Electronics Show last week. It is the first unit built around Airbiquity's in-band modem technology which enables a variety of first-time connectivity features on a PND. And the user interface offers some unique elements worthy of emulation by competitors as well. In the end, however, despite having conquered technology challenges in bringing this innovative device to market, the greatest challenge facing Motorola when the product becomes available later this year, will be gaining shelfspace position at retail in a consolidating segment. The first-time list of features on the Motonav TN700 includes a wide-screen 5.1" display, Bing411 voice-enabled business search, Caller ID for announcing in-bound callers, a scrolling list of POIs that appears on the left hand side of the screen as they are passed by the device, speed camera alerts from Cobra (a capability beginning to show up on other new PNDs), and direct entry of addresses (ie. street number, name, etc.). The Airbiquity in-band modem enables the inclusion of a bundle of services called MotoExtras - free for the first 3 months - including weather, gas prices, flight status, etc. Google Search is also accessible for locating POIs. Traffic data is provided by Navteq free for the life of the device as part of's ad-supported business model. The price of the device has not yet been set, but will likely be in the mid- to high-end range. The speed camera data and MotoExtras will be subject to annual subscription and bundling offers both yet to be determined. The real challenge for Motorola, though, will be gaining a foothold in retail stores where Garmin and TomTom have been adding SKUs to their assortments pushing aside second and third tier brands. According to one industry assessment, the two brands account for 63% of all retail shelfspace, up from 55% a year ago. Motorola currently has 1.8% share in the U.S. Further complicating Motorola's retail ambitions is the low-end orientation of the PND market, with as much as 75%-80% of sales coming from entry-level models, the expected re-emergence of Magellan and Mio later this spring, and Best Buy's ongoing ambitions in the connected PND segment. Related content: Connected PND Database: Automotive and Portable Navigation Forecast:

January 4, 2010 05:01 rlanctot

The marketing battle between traffic service providers will continue into 2010. The good news is that 2009 firmly established the value of traffic data. The turning point came with the introduction of multiple mobile phone navigation solutions, most of which arrived through the aegis of the application store model pioneered by Apple. But new, unusual and creative solutions will arrive in 2010 and change the existing balance of power.


Users of these new navigation systems and the developers quickly discovered that reliable traffic information was the real killer app that mobile users were seeking. In the process they discovered that to deliver reliable travel times they needed a wide variety of traffic data including real-time, historical, predictive and incident data. Unfortunately, one of the key sources of traffic data – radio and television stations with cameras, ‘copters and spotters to report incident information – have suffered in the current downturn. In fact, there are anecdotal indications that radio stations are dropping traffic reporting. A model for delivering nationwide incident data that was previously fueled by advertising and sponsorships is becoming frayed at the edges as TV and radio advertising suffer., ClearChannel and Westwood One/SmartRoute, among others, are all seeking new funding, new business models or new owners in a bid to preserve or enhance their market positions. In the meantime, Google has barged into the market with its own traffic data raising questions over the viability of incumbent players. Google’s entry into any market raises these questions, although the reliability or robustness of Google’s traffic solution has yet to be proven. Inrix, on the other hand, has not based its model on sponsorships or advertising and, as a result, has for the most part avoided the negative impact of the downturn in advertising activity. But with Google getting into the traffic data aggregation and algorithm business, no traffic data supplier is safe including Microsoft's ClearFlow.


Of more immediate concern than Google entering the traffic market is the changing role of mobile-phone based navigation. Google is a player here as well, but it has more company in the form of Networks in Motion and TeleNav and their carrier partners. (TelMap's efforts in Europe have been hindered by the fragmented nature of the market and the negative impact of roaming charges.) While companies such as Cellint, AirSage, and IntelliOne have been seeking to integrate cell-tower triangulation data for probe traffic inputs, expect the carriers to introduce GPS-based probe data in the new year – representing a key added-value advantage. GPS-based probe data derived from mobile phone handsets will not replace triangulated data, which will always represent the greatest volume of “anonymized” location data, but the GPS data is likely to be more timely and accurate, critical to traffic reporting and analysis. The GPS-based data will likely require opt in participation vs. the triangulated data which to date has been applied involuntarily.


Still, good probe data is almost worthless without incident data. Without incident data the system is unable to interpret slowed or stopped traffic – ie. is it weather, volume, construction, a fallen tree limb, an uphill grade? The battle for reliable traffic data will come down to good incident data. This means the industry will see vastly enhanced probe data in 2010, but the gap between reliable flow and reliable incident data will suddenly become much clearer.


Through all the enhancements to traffic reporting consumers have been expressing their interest in better and more timely information and, in particular, more real-time incident information. As an example, RDS-TMC is notorious for the 5-10-15-minute delays in incident reporting, sometimes worse. Drivers want to know what is happening in real time.


In 2010, drivers will begin to get real-time information. Whether that information comes from Twitter, TrafficTalk, Aha Mobile, Waze, TrafficLand or some other solution is not clear. What is clear is that drivers want to know BOTH what has happened in the past and what is happening now. But what they really want to know is what is happening right in front of them.


The solutions will come in 2010 from three key sources: mobile-phone-based crowd-sourced info, traffic cameras and, perhaps, vehicle-mounted cameras. The challenges to delivery include the creation of traffic reporting “crowds,” something TrafficTalk, Waze and Aha Mobile are working on; and camera input interpretation and delivery platforms. Developments in 2009 clearly indicated that drivers must spend less time looking away from the road to navigation interfaces. More information must be conveyed via voice.


Traffic information suppliers will still be looking at a combination of subscription-based and sponsored traffic information. Consumers have clearly indicated a willingness to pay for traffic data, both in Strategy Analytics surveys and in the combined 10 million subscribers to Networks in Motion, TeleNav and XM/Sirius traffic information.


The industry will see some outlandish innovations ranging from delivering traffic camera info to mobile phones to – in 2-3 years – aftermarket in-vehicle cameras to capture traffic incidents. Two things are clear. Better incident data is required and solutions are in the pipeline.

December 26, 2009 18:12 rlanctot
The latest connected portable navigation device from Best Buy, the Insignia NS-CNV43, is both groundbreaking and disappointing. The device introduces Twitter posting of destinations – an industry first - and maintains the Google Search feature of the original Insignia connected PNDs, while adding other connected content services for weather, gas prices, and movie listings. But despite its virtues and advances some vital ingredients are still missing and in a head-to-head comparison to an embedded navigation system in a BMW, the sourced traffic data appears to be inferior to the Inrix-enabled ClearChannel Total Traffic Network data in the BMW. At $149.99 (list: $199.99), the feature rich NS-CNV43 makes a powerful value statement in a Best Buy department crowded with 20+ devices mainly from Garmin and TomTom and including units intended for hiking and boating. The device has haptic touch feedback and Bluetooth phone connectivity, unusual features in a relatively inexpensive PND. (Surprisingly, the device does not allow for voice dialing or voice destination entry, limiting the attraction of the Bluetooth.) (For details on other PNDs and connected PNDs: Improvements on the original connected PNDs from Best Buy, introduced more than a year ago, include an improved windshield mount and text-to-speech. (Nuance has replaced Loquendo.) The Google Search function, alone, is an attractive proposition, but the addition of other content services and Bluetooth make the device a standout. (The Lithium-ion battery included with the device is described as having a two-hour capacity, but in the tester’s experience was capable of lasting less than half an hour and gave repeated low battery warnings almost immediately after being disconnected.) The two biggest shortcoming in the new device relate to the routing software and traffic information – elements critical to its performance. From a routing standpoint, the device delivers the user to the anticipated destination in most cases. But while testing the device in Detroit recently, the NS-CNV43 appeared to fall victim to a Michigan left turn on a divided local highway, putting the user in an endless loop or “make a U-turn” instructions half a mile before reaching the destination. This failure was reminiscent of several similar malfunctions experienced with the original connected Insignia PNDs which are built around deCarta software. (The device also does not display the current speed limit, which is a popular, though-often inaccurate, PND feature) Just as important as routing acumen is the integration of traffic data. Reliable traffic data is critical to determining both arrival time and the quickest route. On two recent journeys the NS-CNV43 appeared to be outperformed by the embedded navigation system in the BMW, against which it was being tested. On a trip to FedEx Field for a Monday night football game working through a combination of rush-hour and pre-game traffic, the Insignia-branded device was unhelpful and appeared lost relative to the unerring guidance from the on-board system. Similarly, navigating rush-hour and holiday traffic to a dinner engagement, the BMW was able to find a back road, avoiding a local highway jam to which the Best Buy device appeared to be committed. Following the guidance of the BMW navigation, the tester arrived at the restaurant ahead of a second car that had a 10-minute head start. All in all, the connectivity of the Best Buy device is attractive and the Twitter function is fun, although probably only practical in limited circumstances. Of greater concern is the longer term cost of the device. The NS-CNV43 comes with a free three-month subscription to the Insignia Internet connected services – and includes the warning: “Insignia reserves the right, at it’s (sic) discretion, to limit excessive data usage on any device.” One of the attractions of the device is that its box promises: “On-demand connected services – no monthly fee required.” What this means is that when the free access to connected services expire they can be purchased on an a la carte, as needed-basis directly from the device. According to a CNET review, as few as three days of service can be purchased for $4.99 or as much as 12 months for $99, with various increments in between. In Summary The new device has improved TTS and an industry-first Twitter function along with Google Search, connected content, Bluetooth and data. The low $149.99 retail price is somewhat offset by the cost of on-demand subscription services that are more expensive than offerings from TomTom and Garmin. Best Buy is making progress, but has more work to do in refining its portable navigation offering and integration of data or the data itself appears to be inferior to ClearChannel Total Traffic Network data.

December 22, 2009 22:12 jcanali
As Strategy Analytics anticipated, the market for digital maps has quickly shifted in the wake of Google’s entrance into turn by turn navigation. In the contrast to Google’s recent announcement to pull away from Tele Atlas as its primary map supplier, Microsoft (MSFT) and Navteq have entered into a “new chapter” in their ongoing partnership in what has been deemed as “a true 'win- win' for both companies” as stated in a recent press release.  While by no means a merger, the implications of this partnership could prove to be extremely far reaching.  Microsoft and Navteq/Nokia have technologies which extend into computer software, computer operating systems, mobile software operating systems, search engines, mobile hardware, and automotive platforms as well as the wealth of location-based data owned by Navteq.   This may prove even more significant as Google has recently leaked its intention to expand into the mobile hardware market. The most immediate benefit will be the use of Microsoft technology to create 3-dimensional, street level maps, which MSFT calls Streetside, for its Bing Beta Maps.  As more PNDs become connected, the ability to house 2D/3D maps onboard while storing street level maps off board will be an important selling point and help to differentiate PNDs from mobile phone navigation.  Street view maps are a fun application, but lack the accuracy for reliable automotive navigation.  Developing a seamless way to switch from street views to more accurate 2D/3D maps will help PNDs to better differentiate themselves from smartphones as PNDs provide better automotive usability. The growth of the connected PND market and smartphone navigation solutions can be seen in Strategy Analytics’ recently updated database listed below: Portable Navigation Multi-Feature Device Specification Database In addition to achieving better quality maps, Navteq has strengthened its position by gaining greater access to consumer markets for smartphones and connected PNDs, and could benefit from Microsoft’s strong position in the automotive market, especially in terms of volume cars equipped with Ford SYNC or Fiat Blue&Me and a system that is currently in the works with Hyundai.  While Google is a company with massive resources and a proven ability to flawlessly execute plans, perhaps the strength of its position in automotive and LBS has been overstated by many in the industry. Garmin should benefit from its close relationship with Navteq, while Tele Atlas/TomTom needs to evaluate its future and ponder potential strategic partnerships of its own.   Although Tele Atlas/TomTom has said that it will continue to focus on accuracy and innovation, these words seem more like hollow executive speak than a signal that Tele Atlas/TomTom believes its business model is still functional.  TomTom’s recent decision to slash the price of its iPhone application in half, from $99 to only $49, seems to belie assurances that everything is alright at the Dutch Company. In terms of Microsoft, the partnership helps Bing better target the mobile and automotive search market that Google seeks to dominate.  Strategy Analytics recently detailed Google’s competitive position in the report:  Competitive Position Analysis of Google in the Automotive Market Google has not been shy about its wishes to dominate mobile and automotive search, in fact, at Navigation and Location 2009 in San Jose, CA, a representative from Google stated, “it is advertising, not navigation that we are after.”  This makes search a vital component for deriving revenues from LBS solutions.  Microsoft is prudently looking to bolster its position against Google’s rapid push into LBS by partnering with Nokia. As reported here, by Telematics Update, the new Bing Maps will include a free voice-enabled search application, allowing the driver to access maps, directions, and traffic without compromising the wheel of their car.  The hands free application will cue the driver will visual signs rather than audio responses, thus giving Microsoft a potentially more powerful value proposition to potential advertisers as well as a solution that drivers may prefer. Still, the battle for dominance in automotive and mobile phone search is just beginning and long battles often make for strange bedfellows.   Google’s decision to pursue mobile phone hardware is certainly going to upset the likes of Motorola, who were relying heavily on the success of Android based phones.   This comes on the heals of pulling away from Tele Atlas and offering free TbT on Android, a platform on which Garmin is building navigation-centric Nuvifones.  While Google’s slogan, “don’t be evil”, may continue to resonate with consumers, these moves may have engendered distrust with potential strategic partners.      With many major players have yet to weigh in including automotive OEMs, Google may be viewed as too ambitious for potential partnership.      Meanwhile, Apple, a darling of many consumers, has yet to fully weigh in, but has not ignored LBS quietly acquiring Placebase last July.

December 9, 2009 17:12 cwebber


TomTom efforts in developing enhanced RTI will help support its brand value and its attractiveness as a connected LBS and navigation solutions partner beyond the PND platform in a highly competitive market. Strategy Analytics user experience research has previously highlighted navigation consumers dissatisfaction with currently available road traffic information, as often deemed inaccurate.


December 6, 2009 21:12 rlanctot

Clarion has reported receiving high marks for its factory-installed, voice-activated navigation system with Sirius Travel Link in the Lincoln MKS. The company says its system ranked highest in J.D. Power and Associates’ 2009 Navigation Usage and Satisfaction Study and the system in the Ford Flex is second on the list. Navigation systems in five Ford and Lincoln vehicles earned five of the top 10 positions, according to the company.


The announcement is significant for several reasons including the fact that the contract with Ford was won by Clarion just two or three years ago – long before the automotive industry meltdown was ever dreamed of. It is also important because the Clarion navigation systems are available on more than 15 Ford vehicles and Ford is showing the most visible success in the marketplace among the Detroit Three.


The news is not only important to Clarion, as the market moves into a recovery phase, it is also important to Sirius Satellite Radio and other Ford partners including Microsoft. It shows Ford’s increasing clout in a market littered with downturn casualties.


The downturn in the auto industry robbed Sirius of its major growth engine - new car sales. In its most recent earnings report, Sirius had surprisingly positive yet still modest good news. Reported revenue of $629.6M increased 2.75% year over year. Subscriber revenue, representing 93.3% of total revenue, rose 2.64% year over year. Net advertising revenue declined 30.5% year over year. Equipment revenue declined 18.3% year over year.  Net additions of new subscribers were 102,295 subscribers, or 0.6%, on a sequential basis, vs. a net loss of 405,181, or 2.14%, year over year. The company ended the quarter with a subscriber count of 18.5M.


Churn, defined by Sirius as the monthly average of self-pay deactivations for the quarter divided by the average self-pay subscriber balance for the quarter, was 2% in the quarter and 2.1% year-to-date. This compares with 1.7% in the third quarter of 2008. The conversion rate, defined by Sirius as the percentage of subscribers that receive Sirius service and convert to self-paying after the initial promotion period, was 46.8% in the third quarter of 2009 vs. 47% in the year-ago quarter. For year-to-date 2009, the conversion rate was 45.3% vs. 49.2% in the first nine months of 2008.


The average revenue per user, derived from adding both subscriber and advertising revenues then dividing that total by the average number of subscribers, was $10.87 vs. $10.51 a year ago. ARPU has averaged $10.67 for the first nine months of 2009, a 1.3% increase year over year.


The company faces continuing market, technology and content challenges including its contract with “shock jock” Howard Stern (expiring in late 2010), future infrastructure investments and competition from technologies ranging from Internet radio, podcasting and automotive Wi-Fi and Bluetooth connectivity to the impact of sun spot activity on service over the next few years.


The success of Ford and Clarion does make for strange bedfellows, though as Ford’s Sync technology may present one of the most immediate competitive threats to Sirius should Ford decide to deploy the Internet radio capability it demonstrated at last year’s Consumer Electronics Show.


Until its Ford win, Clarion was probably best known for its work for Nissan and Infiniti. Here, again, Ford’s success is a boon to both Clarion and its partners including Zenrin for map content and Nuance for voice technology. Ford’s success has thrown off additional accolades for many of these suppliers contributing to their success on other platforms and with other suppliers. Sirius, for example, has just announced that Mercedes will add Sirius traffic to its 2010 model year vehicles.


The success of the Ford system has a lot to do with its user interface which includes an enhanced, touch-enabled display with high contrast and company-specific colors and graphics. It is also noted for the performance of its voice recognition system. The combined solution is a powerful on-board and connectivity-enabled system that continues to receive high scores from consumers and serves as a model for the industry.

December 2, 2009 15:12 rlanctot
TeleCommunication Systems (TCS) has announced that it has entered into a definitive merger agreement to acquire Networks In Motion for an aggregate of $170M. The merger consideration will be paid in a combination of cash, TCS common stock and promissory notes. Networks In Motion's Board of Directors has unanimously adopted the merger agreement and recommended its approval by Networks In Motion's stockholders. The acquisition accelerates TCS' position in enabling mobile operators to offer enhanced location-based data services. The move by TCS reflects the relatively quiet success achieved by Networks in Motion and TeleNav and a couple of other companies in building a highly profitable business around a combined base of approximately 20 million+ subscribers to navigation applications for mobile phones. The $170M valuation also helps TeleNav which is approaching an initial public offering. The announcement is potentially bad news for Google which recently entered the smartphone navigation space with its free turn-by-turn navigation application for Android-based phones. NIM's relationship with Verizon will likely result in Verizon-only capabilities being leveraged in the market, such as probe-based traffic data, which Google will be unable to match due to its much smaller base of users. According to Strategy Analytics estimates, Android-based smartphones will represent approximately 10% of all smartphones in 2010, but only a subset of these will be compatible with Google's TbT application and only a subset of these will actually download the application. Nevertheless, the navigation on smartphone business opportunity has again proven to be more significant than originally thought, now representing a market worth, in total, as much as $2B. Much of this value is deriving not only from the application subscriptions but also from the sale of additional "premium" content, such as traffic data, or updates within the applications, not unlike other profitable application segments, such as on-device gaming. In the end, carriers are more likely to support navigation partners that provide a path to profitability from subscriptions and in-application sales versus free applications such as Google's Tbt offering. So, while Navigon will continue to dominate the iPhone navigation segment and Google will increasingly rule the Android world, a combined TCS/NIM will grow stronger via its relationship with Verizon. Of course, TCS/NIM will also benefit from offering a more fully evolved and acceptable navigation solution relative to the Google offering.

November 16, 2009 12:11 rlanctot
Mercedes-Benz launches its Mbrace 3G-based telematics system today as standard equipment on all models except the GLK, the E-Coupe, the SLK and C-Class cars. It is an option on those models. The first six months of service are free and $280 a year after that. Keeping the concierge service costs $20 a month. The new system sets a new standard for smartphone integration, upgradability, voice recognition, dealer-customer integration, car-phone-PC integration, and customer support via three call centers one each for roadside assistance, concierge and emergency calls. Mercedes has been quoted as saying that it plans to add an application store and is also looking at enabling access to concierge and other services via the customer's phone, independent of the car. The bottom-line is the system is intended to be future-proof. The announcement marks the beginning of a transition by Mercedes away from current TeleAid telematics service provider ATX toward Hughes Telematics. The Hughes Telematics vision of service provision ultimately includes satellite and Wi-Fi connectivity, but the Mercedes system launches with 3G cellular connectivity. (Hughes' plan also calls for Website management of vehicle status and diagnostics. It is not clear how much of this capability, if any, will be available at launch.) The significant aspects of this industry changing announcement includes: -> VoiceBox natural language understanding voice engine. - Mercedes is the second OEM, after Lexus, to implement this technology which allows users to make naturally spoken requests for information and assistance either for controlling the car or for location information. The voice recognizer can speed access to information regarding weather or location data, for example, by eliminating the need to connect with an operator, but the operator is still available if the voice recognition fails. -> Three call centers for processing different types of calls. - Most telematics systems use a single call center for processing all types of calls. The Hughes system behind Mbrace has separate call centers for ACN or emergency calls, roadside assistance, and concierge services. -> Upgrade and updatability - Applications can be added wirelessly or at the dealer. -> Connectivity to customer phone - Vehicle doors can be locked or unlocked remotely via smartphone. The vehicle can be located in a crowded partking lot via smartphone app. If the vehicle is stolen, the user can be notified via text message. Additional smartphone functions will be available and an "app store" is in the works. Bluetooth connectivity is also provided for. -> Access to off-board information - Routes and POIs can be sent from Google to the car. (The Hughes vision ultimately calls for Website management of vehicle status and content ranging from audio and video files to service status and remote diagnostics. Mercedes will either be enabling these capabilities at launch or shortly thereafter.) -> Dealer connect - The system will connect the nearest Mercedes dealer if there is a problem. -> Automotic collision notification - Activated in the event of an airbag deployment or by a press of the SOS button, a Mercedes operator will get on the line, notify 911 and stay on the line until help arrives using vehicle coordinates. -> Real-time weather and traffic reports - Also provides real-time assistance in the event of a disaster. An operator will help locate shelter or alert family members. -> Concierge service - Access to a representative who will help make dinner reservations, order flowers, buy tickets to the opera, or book a flight. -> Access to services via phone - Mercedes may eventually allow access to services via phone independently of the car. Link to Wired News story: Related Strategy Analytics reports: Telematics as a Downloadable App Arrives - App Stores Coming to the Automotive Market - 27M Users of eCall and Infotainment Services by 2015 - Economic Climate Demands Sharper Connected Vehicle Business Models -

October 27, 2009 18:10 jcanali Microsoft has announced that as of January 1, 2012, its Road Traffic Information (RTI) service, MSN Direct, will be discontinued.   MSN Direct is an FM radio-based digital service which allows specially equipped portable devices to receive information from MSN Direct services in the US.  Devices that support MSN Direct include PNDs and embedded navigation units.  With these devices, subscribers gain access to road traffic information (RTI), as well as weather, gas prices, local events, stock quotes, new movie information and flight times. MSN Direct’s business model faced challenges from the start Two years ago when the PND market was in a strong growth phase and fuel prices were high, the MSN Direct product looked promising as it developed ties with US PND leader, Garmin, as well with aftermarket navigation system suppliers.   With a price point of $129.95 for MSN Direct for the duration of the device (and recently reduced to $99.95), a compelling case for RTI and fuel services could have been made to consumers.   When the price of the service is amortized over the product life (roughly 3 years) a consumer would only need to save about $0.83 a week in fuel to cover the price of the service. However, MSN Direct suffered greatly from being removed from point of sale of a navigation device.   As an add-on service, MSN Direct had little control over how aggressively its service was sold to buyer of PNDs and aftermarket navigation at Big Box stores or even how well buyers were informed of the service. Furthermore, most Americans tend to be quite comfortable receiving traffic updates from traditional media sources such as television and radio.  To many, the perception of RTI quality does not merit paying for what can be attained through traditional media.   To others, MSN Direct was simply not perceived as high-tech enough, as RTI technology has been evolving rapidly. In Jul-09, Strategy Analytics spoke to representatives from MSN Direct who remained optimistic about the future of MSN Direct, stating, that by winter of 2009, the price of MSN Direct receiver chips will be the same price as RDS-TMC chips, or about $1 and that a further reduction in subscription price points should drive subscription.   Strategy Analytics remained dubious about this possibility, especially as Navteq was grabbing for market share by offering free lifetime traffic updates on some Garmin devices and access to traffic information over mobile phones.   This coupled with greater distribution of traffic information via cellular to smartphones appeared to sound a death knell for MSN Direct and other paid RTI services that provide the very highest quality RTI. Not the end of Microsoft in RTI The demise of MSN Direct does not mean Microsoft has exited the market on RTI, but instead simply has taken a breather.   Microsoft Research laboratories have spent five years developing a complex software model called Clearflow.  Clearflow is designed to help one determine if it is truly faster to detour when one is confronted with a traffic jam.   According to U.S Microsoft, Clearflow will be integrated into Bing Mobile and other Microsoft mobile applications, including in-car navigation and personal navigation devices and Clearflow will be available at no cost.  In addition, Microsoft beat Google out of the blocks in announcing real-time search with non-exclusive deals with both Facebook and Twitter.   The demise of MSN Direct does not diminish the role of RTI, but rather reflects the evolution of the RTI, interlinked with navigation and location. Clear business models will win the day The implications of MSN Direct’s demise should signal to others such as Sirius XM Traffic that trying to establish a directly consumer funded TMC+ service in volume markets continues to be extremely difficult.  Ad-funded models are also in the early stages of evolution.  And while the lessons are less clear for TomTom and others offering truly premium traffic services, they should to take note of MSN Direct’s difficulties in overcoming RTI quality perception issues, establishing well targeted price points, and how to bundle, successfully, RTI with navigation. The future of 'standard' RTI services is when they become more fully integrated with turn by turn navigation and maps, and together, they start to be used to 'hook in' consumers for high end high quality RTI, and location based services and applications. Strategy Analytics has profiled a wide range of RTI vendors in the forthcoming report 'Road Traffic Information: Competitive Positioning and Business Models', publication due Nov-09 Strategy Analytics has addressed the changing nature of the Location Value Chain in a Oct-09 webinar at: Strategy Analytics will be hosting a panel discussion on Road Traffic Information at’s Navigation and Location conference on December 1-2 in San Jose, CA at:

October 16, 2009 15:10 jcanali Most consumers recognize Google Maps, yet few knew that Google Maps had rested on map data belonging to others, at first Navteq and then Tele Atlas. Navteq and Tele Atlas have dominated the lucrative business of supplying map data, a position that many believe will grow increasingly lucrative as location based business opportunities increase. While there have been rumblings that “crowd source” mapping would soon threaten Navteq and Tele Atlas, these maps would unlikely be sufficiently accurate for commercial use. With major barriers such as, heavy infrastructure costs for developing and maintaining maps, Navteq and Tele Atlas appeared comfortably in control of the maps data market for the near future. Leveraging its brand recognition and heavy user traffic, Google has announced that it will now use maps based upon TIGER (provided by US Census Bureau) maps, an undisclosed third-party, its extensive StreetView data, and crowd sourcing. While this only applies to the US, the implications are vast. Google has un-tethered itself from the weighty licensing fees and conditions that Navteq and Tele Atlas attach to their data, though Google’s freedom comes at the expense of map accuracy. Navteq and Tele Atlas have made a business of having high quality maps and these have been extremely important for automotive navigation. While Google has proven that it can work rapidly, in 2008 Street Views imagery saw a 22-fold increase, Google will still need some time to catch up in terms of quality. The degree of quality that Navteq and Tele Atlas offer are not required for all location based applications. Google could quickly provide first rate maps of major metropolitan areas, these areas will prove to be the most lucrative as location based opportunities emerge. While these maps might not be appropriate for automotive navigation, there is certainly opportunity with mobile device applications. Recently, Google’s CEO, Eric Schmidt has said, “We can make more money in mobile than desktop eventually because the mobile computer is more targeted. You carry your phone everywhere, it knows all about you, it knows what you’re up to. We can do a very, very targeted ad. Over time, we’ll make more money from mobile advertising”. Untying itself from Tele Atlas, Google can offer maps and an API for others to use these maps without being saddled with licensing restrictions which severely hampered efforts to deploy ad-supported applications. In the longer term, Google will certainly aim to rival Navteq and Tele Atlas, as controlling map data will put Google in a more secure position on the location based opportunity value chain. The relative comfort of a virtual duopoly has been shattered; Navteq and Tele Atlas will need to focus on providing better maps and faster updates at lower prices with fewer restrictions. Navteq (owned by Nokia) and Tele Atlas (owned by TomTom) boasted strong strategic relationships within the location based market, Google will certainly look for greater integration on Android phones. While this announcement is concerning to Navteq, it is painful to TomTom/Tele Atlas. Google is likely already positioning itself to use its own maps in numerous countries across Europe. The competitiveness of TomTom/Tele Atlas might well be strengthened by the development of more wireless operator relationships for navigation and location applications, but maybe this is too late. Strategy Analytics has also examined consumer brand perceptions of Google within the navigation market in the Oct-09 complimentary webinar at: Strategy Analytics has recently examined Google’s entrance into the automotive market: