One of the biggest revelations about the new iPhone 3G is the inclusion of GPS tech, but it may not be enough to bring down the GPS-only manufacturers. After we heard a rumor that GPS maker Tom Tom was going to have a software app ready for the iPhone's App store within the next few months, we immediately contacted a company rep for a comment, and this is what we received:
All I can say is that we have tested and successfully run our navigation software on the iPhone and it looks good and works well. We'll have to look more closely to Apple's strategy before we can say more about what kind of opportunities this will bring us. . . Apple is developing pedestrian navigation demand, which we see as complementary to the already developed demand for dedicated car navigation solutions. With more and more people getting acquainted with navigation, this will also further grow the demand for car navigation.
That seems like an admission to us, and a pretty clear one with a very specific outline of their strategy.
But let’s back up a sec. At first glance, this development seems like it’s a pretty radical idea. Why would Tom Tom want to compete with itself? Even if they charge the same price for their iPhone kit as they do for a stand-alone unit, it would almost render those physical units obsolete.
Plus, many people wouldn’t buy two devices that can do the same thing. Or would they? If you think about it, the addition of a Tom Tom app for the iPhone makes sense because of the two reasons illustrated above:
- A growing market. Many people out there still don’t have a GPS unit, and if they get one that doesn't have all of the bells and whistles of the main units (like the voice commands), people might fork over money to get the second unit. As long as the iPhone version of the kit is still better than the competition's in the App store, people will be willing to pay for a premium kit. This idea is clearly implied in the reply above. Isn’t this the whole reason why people are buying more iMacs, because the iPhone gave them a taste of the OSX and its simplicity? But what if an out-of-blue company creates a great GPS app for a small price? People will sacrifice quality for the GPS info, but up to a point.
- As the reply directly addressed, the majority of the growth in the GPS market comes from cars. And the best GPS-only units offer a better device with a larger display than the iPhone’s. If you have a hard time watching Lawrence of Arabia on the tiny screen while standing still, what makes you think you’ll see your driving directions while rasslin’ with the kids in the middle of a traffic jam?\
The one area that might suffer is the handheld GPS-only units. They haven’t taken off completely yet (like Garmin's Colorado 400t). And GPS companies might yet come up with a better portable than whatever is offered on the iPhone, but people may not want to carry two semi-large devices in their pocket. So attaching yourself to the one thing people will definitely carry is a better option at this point, and they can make up the money in hardware savings.
Before Monday's announcement, the iPhone EDGE network could already help locate a user's location through tracking Wi-Fi hotspots and cell towers. But with the added GPS feature, you'll now be able to take direct advantage of it. Services that manage the location of net-based users (like Loopt) could finally be taken out of the box and be used more realistically, tracking you all the way to your friend's specific location, and without toggling between slow browser windows.
