GPS-enabled cell phones spark fierce competition
Think of all the high-tech cell phone ads you’ve seen lately. They all seem to promote the media capabilities of the handsets, from music downloads and playback to video capabilities. These ads suggest that consumers use these devices primarily for entertainment, but the consumer appears to have a different desire. More and more users are buying GPS-enabled phones, and this has created a rush among the telecom companies to acquire digital mapping and navigational technology.
According to a recent article in BusinessWeek, the number of GPS-enabled phones will reach 162 million this year, far surpassing the number of vehicle-based navigational devices. Nearly every handset manufacturer has either released a GPS phone or has plans to do so very soon, and the market for navigational software and mapping services has reached a fever pitch. This service shows huge potential for profits, as wireless users spend far more on navigation than they do on music downloads.
Consumer access to GPS signals is fairly recent; until 2000, satellite navigation was restricted for military use, to position troops, guide missiles, or locate enemy forces. GPS units have virtually replaced the compass in a soldier’s rucksack in the 1990s, and they are indispensable for locking missiles on target and for search and rescue operations. Up until the new millenium, GPS signals were obscured for security reasons and were of little value to the average suburban mom trying to find the nearest grocery store or the group of Boy Scouts hitting a hiking trail. Clear signals were opened up for general use in 2000, and the car-based GPS unit saw massive growth.
Cell phones are becoming a more and more universal necessity, and the vehicle navigation industry is rightfully shaking in their boots with the inclusion of GPS mapping capabilities on handsets. This has sparked a series of mergers and deals between the major GPS device makers and digital mapping companies. Tom Tom bought out mapping firm Tele Atlas, while Nokia snapped up Navteq, leaving heavy-hitter Garmin out in the cold and facing the possibility of buying its mapping data from a competitor.
The increasing demand for GPS-enabled phones, and the quick response of the industry players, means that mapping services will be higher quality and lower cost than ever before. This also opens up the market to more groups who can benefit from GPS services. Physicians could make cost-effective house calls quickly to house-bound patients. Delivery personnel such as postal workers or UPS drivers will cut down on the time (and fuel) it takes to complete their routes. Even long-haul truck drivers would be able to avoid problematic traffic and construction zones to reach their destinations more quickly, which could potentially reduce the prices of goods and services across the board. As always, when competition heats up in any industry, the consumer is the winner.
By Haley January Eckels