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

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.


November 19, 2009 11:11 Ian Riches

I have just returned from an enjoyable and informative couple of days at the International Automotive Electronics Conference in Paris.  As well as making a presentation on short- and long-term growth trends in automotive electronics, I also moderated a panel discussion on how the automotive industry can meet consumer demands and needs. Thinking that the best way to start meeting needs is to stop annoying people, I asked the assembled approximately 200 delegates to think of the most annoying feature on their current vehicle.  I then asked them what vehicle domain that feature was in.  One or two delegates found aspects of their powertrain annoying.  Very few, if any, were annoyed by comfort/convenience or chassis features.  However, I would estimate that over 90% of those present raised their hands when asked if their most annoying feature was in the multimedia/infotainment domain. Talking with individuals afterwards, a picture emerged of two main categories of annoyance:

  • Missing or incomplete features.  For example, an expensive OE-fit navigation system that offered less functionality than a low cost PND and could not be upgraded.
  • Features that were difficult to use or unreliable.  These included Bluetooth handsfree systems that were awkward or complex to pair.

Although it is perhaps unfair to put 100% of the blame on the OEMs and their suppliers (Bluetooth stacks on phones are not always perfect!)  this informal survey shows that the industry still has a lot of work to do before it can claim to be meeting consumer demands and needs for multimedia. It needs to stop annoying them first.

November 4, 2009 20:11 jblight
On 29-Oct-09, Google launched Google Maps Navigation (Beta) an internet-connected GPS navigation system with voice guidance.  It is part of Google Maps for mobile and is available for phones with Android 2.0.  This move will massively boost consumer adoption rates for navigation on smartphones and put huge pressure on the PND and connected PND market.  Google also leads as the preferred consumer navigation brand on mobile devices with consumers across the US, UK, France and Germany.  The move however does not spell disaster for navigation device and solutions vendors.  Market opportunities for navigation and location products, features and apps will be characterized by segmentation and product differentiation.  The key to successful business models is in understanding consumer price, feature, feature sets and usability preferences. Lessons can also be drawn from the digital camera and portable music player markets.  The full implications of the Google Navigation Beta launch on navigation competitive dynamics are discussed in the new Strategy Analytics report ‘TomTom and Garmin Will Survive Despite Google's Entry Into Turn By Turn’.  The key conclusions are:  1. The navigation market is still far from becoming a ‘de-facto Google navigation and location monopoly’. Offering free turn by turn navigation will not guarantee total market dominance for Google.  Google’s entry into turn by turn navigation will however result in a major shift in the competitive dynamics.  In Strategy Analytics’ view, Google still faces significant competition, particularly from Nokia-Navteq and Microsoft.  2. Comparisons and lessons can be drawn from the digital camera and portable music player markets. Two years ago the camera became a widely available feature on phones but the standalone camera market is still healthy and opening up new product opportunities including for GPS and connected camera and video devices. Free Google turn by turn navigation will not spell the immediate death of all the other product alternatives, most notably PNDs.  The introduction of ‘free’ navigation on smartphones, can be arguably compared with the introduction of the camera and digital music features on wireless handsets.  According to Strategy Analytics Global Wireless Practice, ‘cameras on phones have been just about the most popular feature launched in recent history (apart from voice and SMS)’.  However the portable digital camera market didn’t die as a result. 
  • According to Strategy Analytics Digital Consumer Practice, over the period 2003 to 2009, global shipments of digital cameras grew from 49M units to 116M units.
Similarly, the rapid integration of digital music playing capabilities onto handsets has not stifled the growth in dedicated digital music devices.
  • According to Strategy Analytics Global Wireless and Digital Consumer Practices, global sales of wireless handsets with music playing functionality has expanded significantly, rising from 48.1M in 2004 to 793.9M units in 2009. 
  • Yet sales of dedicated digital music players continued to expand simultaneously, rising from only 26M units in 2004 to 141M units in 2009.
3. Monetization and product differentiation are the key challenges. Strategy Analytics has long argued that monetization and product differentiation are the key challenges facing all vendors aiming to develop business models in the navigation and location market.  The competitive landscape will continue to be highly dynamic due to increasing wireless market complexity.  4. Clearly targeted consumer experience research of navigation and location is critical. More consumer research is required to identify the highly segmented consumer preferences for: different navigation products, apps and services; the bundled features sets of those products; the quality thresholds and usability of the navigation and location applications; brand preferences; and the price points and price models that are going to be most successful in different target markets.  5. Market consolidation can be expected particularly between navigation solutions providers. The competitors in the value chain most exposed as a result of this move by Google are the suppliers of navigation solutions to the wireless operators.  Increasing distribution routes to market, and developing navigation and location products will be costly and small specialist players are vulnerable.  It can be argued that there will now be significant questionmarks surrounding the 30-Oct-09 announcement that TeleNav has filed for IPO. As Strategy Analytics’ indicated in the Oct-09 blog 'Wireless Devices and Operator Solutions the Next Big Push for TomTom', there will now be distribution and other business opportunities to be gained from consolidation between players.  These issues can explored further with Strategy Analytics analysts in person at the forthcoming Navigation and Location USA Conference, 1-2 Dec 2009.

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 20:10 jcanali

According to GPS Business News this week “TomTom unveiled some interesting data about the trend of the Personal Navigation Device (PND) market in Europe and in the world during a press conference in Paris, France. For the first time the PND maker is not expecting this market to grow over the next five years”. Is ‘The future of PNDs in Europe: less revenue, more profitability?

This conclusion supports Strategy Analytics Sep-09 analysis of quarterly PND metrics and market share tracker, which shows a marked increase in Q2-09 operating profit per PND sold for both TomTom and Garmin:

A key factor for improving profitability for PND players is to widen the distribution channels for navigation solutions. Distribution of navigation solutions to phones is now emerging in 3 clear areas; devices with pre-install, services activated with wireless operator; and apps that can be downloaded from apps stores/direct from the navigation provider. Market positioning of the phone focused navigation solution providers is currently different from traditional PND vendors, and some general clusters of companies are emerging: device pre-install providers – Appello, deCarta, Route66; wireless operator services – TeleNav, NetworksInMotion, TelMap, ALK, Wayfinder; with navigation providers also distributing directly online and via apps stores.

Nokia, by far, has the lead on the pre-install maps and navigation app market, leveraging from its ownership of Navteq, but SonyEricsson is building activity too. For other key wireless devices vendors including LG and Samsung, the issue is about providing desirable applications to show case handset capabilities and making their handsets more relevant and appealing to consumers. It is also about not being left behind by their competitors. If Nokia and Sony Ericsson are offering pre-installed turn-by-turn navigation then LG and Samsung will also be under pressure to take a lead on device pre-installed maps and navigation apps too. This presents significant new navigation apps opportunities.

We are starting to see a shift from leading PND vendors into phone navigation solutions e.g. TomTom, Navigon and ALK CoPilot apps are now available for iPhones via iTunes, with a Garmin solution expected, and Garmin is launching the Nuvifone G60 in the US in Q4-09. But the device pre-install market is still very fragmented across the regions and the traditional PND players have not developed partnerships with wireless operators.

Yet there are some brand and quality issues surrounding the navigation that are available pre-install, via a wireless operator or a downloaded app. A consumer might not know, remember, or just not care, whether the navigation system they installed on their mobile was from their operator, their handset manufacturer, or from a third party; and the navigation brand may easily be subsumed by the overall brand of the device/operator. This opens up opportunities for trusted, well known consumer brands with high quality and robust navigation solutions.

TomTom and Garmin have strong consumer brand perceptions in navigation and this will likely be leveraged more widely into the device pre-install and wireless operator distribution channels for navigation.

This blog summarizes discussions following the recent complimentary Strategy Analytics webinar ‘Navigation Usage Across the Product Platforms’