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The Garmin nüvifone: Another Attempt at Designing the Perfect Converged Device
Author: Dominique Bonte, Principal Analyst, Telematics & Navigation
Mon, 4 Feb 2008 05:03:56 EST
While many PND vendors such as TomTom, Magellan, Mio, Dash and Mobile Devices are focusing on connected Personal Navigation Devices, Garmin has chosen the different route of developing a handset with integrated navigation. It may not be the easiest route. Undoubtedly, the iPhone has served as a successful and tempting example of how to adapt the handset form factor to accommodate data applications in a user friendly way. While the iPhone has clearly made the case for mobile web browsing - for the first time – it is less clear how successful a navigation-centric handset will be. With the launch of the nüvifone, Garmin is reopening the debate about dedicated navigation devices versus converged solutions. The PND owes its success in a large part to the ease of use of its user interface which is single mindedly designed for an optimal navigation experience: a large 4.5 “ touch screen, an optimized menu structure, speech recognition, a high-sensitivity GPS receiver, an FM transmitter for integration into the car audio system, … It is hard to see how handsets will ever be able to compete with PNDs, at least for in-car navigation. There are simply too many constraints in terms of size, battery power, memory and processor speed despite the fact that in the future the boundaries between PNDs and handsets will increasingly becoming blurred, with each category emulating each other’s features and capabilities.
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On the other hand, Garmin has identified and implemented a number of key features such as text to speech, geo-tagging, search functionality and a range of on-line navigation content services all of which are relatively new in the handset environment. It remains to be seen whether this is enough to convince customers to buy Garmin handsets. After all, the nüvifone is neither a smartphone nor does it offer off-board or outdoors navigation – a missed opportunity. There is of course the prospect of an emerging but still unproven Location Based Services market.
But let’s not be too negative. Launching a handset is a brave initiative. And there is no doubt Garmin has the engineering skills to bring this endeavor to a good end as they have a long tradition of in-house hardware and software development. They also have a strong brand and a high quality image. However, in order to succeed where other companies such as Siemens, BenQ and Sendo have failed, Garmin will have to excel in marketing and carrier partnerships, domains in which they don’t have established a good track record. The handset market is an unforgiving place with decreasing margins and fierce competition. Acquiring market share quickly will be a key success factor which will largely depend on the price setting. Even Motorola has been struggling to bring its handset division back into the black – it is even rumored they might spin it off and sell it all together.
However, it is important to realize that the nüvifone has not been designed to compete in the global handset space but rather in the (micro)segment of navigation-centric phones. It belongs to the same category as Nokia’s 6110 Navigator which has been optimized for navigation with dedicated navigation buttons and seamlessly integrated navigation software. As many on-board handset-based navigation software solutions still suffer from reliability and performance problems, the nüvifone is expected to fill a gap in this segment. It may well follow in the footsteps of both the Blackberry and the iPhone, becoming the iconic navigation handset just like RIM and Apple have done before with their e-mail handset and mobile web device.
Perhaps the most relevant conclusion is the fact that the navigation and location ecosystem continues to surprise. Just months after having lost the bidding war with TomTom for the control of Tele Atlas, Garmin embarks on a new adventure which is by no means less controversial than the acquisition of digital map providers. It symbolizes the dynamic nature of the navigation market combining high levels of innovation, vision, boldness and required capital to expand beyond the traditional boundaries of navigation. The major navigation players have become powers to be reckoned with, challenging established mobile and internet companies.
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