Marketers of portable navigation devices believe this will be the breakout year for systems that are no longer just for the directionally impaired. Prices have come down and features have increased -- the systems can play music, sync to digital cameras and download databases of stores and restaurants -- and that's leading marketers to push them hard for the holidays. The GPS market for installed and portable devices is expected to hit $3.4 billion this year.
|TomTom has a deal with Dunkin' Donuts and Baskin Robbins that places locator symbols on the map on the navigation device, which can even beep to signal a nearby shop. Click to see larger image.|
The price seems right
"This is the first time there are quality products in the sub-$500 range and so manufacturers are thinking it's about time for the U.S. market to take off," said analyst Rob Enderle of the Enderle Group.
In Europe, where the personal-navigation market is considered to be about 18 months ahead of the U.S., there are more than 150 different products from more than 30 marketers on retail shelves, said Anne Louise Handstad, VP-marketing for one of the leading vendors, TomTom, headquartered in the Netherlands. More than 12 million handset-based personal-navigation devices will be shipped in the U.S. and Europe by 2009, up from 1 million in 2005, according to researcher Berg Insight.
Along with market-share leaders Garmin, TomTom and Magellan, who have a combined market share of about 85% in the U.S., competitors including Sony, Nokia, Panasonic, Rand McNally and Uniden have either launched consumer GPSs or announced plans to do so. Analysts predict that sales of personal-navigation devices in the U.S. will triple this year and double again in 2007.
But even with the expanding market making room for more competition, the leaders want to keep their head start. Garmin has launched a TV from Publicis Groupe's Fallon, Minneapolis, highlighting its personal-navigation device, Nuvi, that uses the traditional holiday song "Carol of the Bells" with Garmin-GPS-themed lyrics ("Give a, give a, give a Garmin"). Its also using print, radio and online.
"We believe this is a category that's about to break out," said Alex Leikekh, Fallon group account director. "We look at it as this is sort of where iPod was three years ago."
Portable navigation devices aren't just being marketed -- they are also being used in marketing.
TomTom has a deal with Dunkin' Donuts that shows "D" locator symbols on the map on the navigation device, and can even beep to signal a Dunkin' Donuts shop. Rival Garmin has partnered with Entertainment Publications to offer a saver's guide in its devices in which users can find coupons from its local Entertainment book by searching in saver mode. Garmin also shows small banner ads in its real-time traffic section.
"Advertising is an area that's still very new and being explored," said a Garmin spokeswoman. "Most GPS have millions of preloaded points of interest, so you can find the local Starbucks or pizza shop easily, but it's not advertising."
Sticking with one message
But because the market is just beginning its upswing, expect messaging for most of the players to focus on the device's original application: getting directions. "The market is still so new in the U.S., the primary message has been about navigating from point A to point B easily," Ms. Handstad said. "Until the industry is a bit more mature, you won't see ad messages built around downloading content."
TomTom's holiday TV push, created by Boathouse Group, Waltham, Mass., uses humor to show everyday situations where navigation devices help.
Ross Rubin, analyst with NPD Group, said: "Over time, these devices are going to take on two functions. They'll really bring other kinds of information into the car: local news and weather, MP3 players and photos, or even as video players."