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 Back to 2006 Press Releases
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Gartner Says Vehicle Navigation Manufacturers Must Expand Their Value Proposition or Face Commoditization by 2010 |
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| The Evolution of Navigation Technologies and Applications will Occur in Three Phases |
STAMFORD, Conn., May 18, 2006 - Vehicle navigation systems have provided a significant revenue opportunity for the automotive industry, however navigation manufacturers must enhance their offerings to maintain prosperity, according to Gartner, Inc.
"Disruptive forces in the form of growing competition and technology advancements will ultimately lead to navigation applications losing their premium status and becoming ubiquitous at low price points over the next four years," said Thilo Koslowski, research vice president for Gartner's Manufacturing Industry Advisory Service. "This will change consumer demand and requirements for navigation applications. For example, in the United States 24 percent of consumers interested in vehicle navigation would prefer a portable solution over an embedded one."
Nearly 40 percent of vehicle owners in the United States and Europe want to add navigation functionality to the next new vehicle they are planning to buy - a significant market opportunity compared to 8 percent and 20 percent of U.S. and European consumers respectively who currently own embedded or portable navigation solutions. However, consumers are struggling to find the right balance between price and value, especially when considering costly, factory-installed navigation systems which are likely to benefit providers of portable navigation solutions such as cell-phone based navigation.
To avoid the risks of profit erosion and commoditization of traditional navigation applications and basic content (for example, map data), vehicle manufacturers and other market contenders will have to evolve navigation offerings beyond the traditional value proposition.
"The evolution of navigation technologies and applications will occur in three phases," Mr. Koslowski said. "The first phase will focus on improving user interfaces and enhancing the functionality of navigation solutions, for example by adding predictive traffic information. The second phase will emphasize personalization aspects such as the integration of vehicle navigation solutions with a users' calendaring, time management and media applications. Finally navigation systems will support legislative mandates for traffic management, taxation and real-time cost assessment such as calculating trip-related costs based on tolls, gas consumption, and pay-per-use insurance."
The value-chain is still emerging, but vehicle manufacturers, suppliers and portable navigation solution providers must collaborate with companies, governments and public institutions to develop a strong value proposition for next generation navigation applications.
Mr. Koslowski will present additional insight on the in-vehicle information and communication industry at the Telematics Update conference on May 23rd in Detroit.
More information is also available in the Gartner report "Vehicle Navigation Must Evolve or Face Commoditization". The report predicts a radical evolution of navigation technologies and applications during the next eight years from a luxury item to a necessity. To avoid commoditization, companies must counter aggressive pricing strategies with product innovation and expanded functionality. The report is available on Gartner's Web site at gartner.com.
CONTACT:
Tom McCall
Gartner
(408) 468-8312
tom.mccall@gartner.com
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About Gartner:
Gartner, Inc. (NYSE: IT) delivers the technology-related insight necessary for its clients to make the right decisions, every day. Gartner serves 10,000 organizations, including chief information officers and other senior IT executives in corporations and government agencies, as well as technology companies and the investment community. The Company consists of Gartner Research, Gartner Executive Programs, Gartner Consulting and Gartner Events. Founded in 1979, Gartner is headquartered in Stamford, Connecticut, U.S.A., and has 3,700 associates, including 1,200 research analysts and consultants in 75 countries worldwide. For more information, visit www.gartner.com.
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