First came SMS. Next was the camera, and then music. The mobile phone industry is now getting ready for its next big thing?navigation. Phone handset vendors like Nokia, HTC, Asus, Sony Ericsson and Motorola are promising a flurry of action. Market leader Nokia is confident of steering ?location tracking and navigation? features to the five most popular mobile phone applications soon. Taiwanese phone vendor, HTC expects to integrate navigation capabilities in 8 out of the 10 phone models it will sell next year.
Roadmaps laid out by other vendors also show a plethora of navigation-ready cellphones in the next 12 months. The excitement has spread to car companies too. General Motors counts navigation devices among the top selling electronic devices in their high-end cars.
As Indians taste the pleasure of pleasant voices guiding them down the narrow lanes and bylanes, the market estimated to be worth $30 billion globally, is hotting up in India. Having seen a growth of 132% last year, navigation devices alone are expected to net $12.8 billion worldwide by 2010. Mobile phone usage is not far behind. The US and European mobile subscribers accessing maps from their cellphones grew 82% and 49% respectively between March and May 2008, according to the latest figures from monitoring service comScore.
We will have 1.5 million fully functional personal navigation devices in India by 2011, according to market research firm, Canalys. ?Mobile navigation caught on in Europe in 2003 and the US followed in 2006. It is now Asia Pacific?s turn,? says Canalys global positioning system (GPS) navigation analyst for Asia Pac, Daryl Chiam.
Only the other day, the market to help users track location and find their way was restricted to logistics companies and those setting shop in the hinterland. GPS receivers are beginning to reach consumers, thanks to falling prices, technology advances that have shrunk core functions to a single chip and improved cartography since government agencies eased up on secrecy. Vendors like MapmyIndia offer street-level maps for 174 cities with over 4,50,000 points of interest like ATMs, restaurants and hotels. With the help of the system of 24 satellites, the device shows you in real-time where you are and in which direction you are headed, besides giving you detailed voice and map instructions to your destination.
MapmyIndia managing director Rakesh Verma still recalls knocking at every device vendor?s door about two years back to offer a personal navigation device in India. No one showed any interest in his digital maps that had helped companies like Coke set up their distribution channel in India. The biggest challenge then was the perception that Indian roads had not been mapped well. ?Even after our maps were available on Yahoo, it was difficult to prove that good maps existed, and Indians will actually want to pay for navigation,? recalls Verma. The real hurdle was, and continues to be, that people are not used to reading maps whether analogue or digital. Indian drivers are much more comfortable rolling down the window and ask for their way around.
Unfazed, Nokia has taken the lead in pushing the market hard and is estimated to have cornered more than half of the market. ?It is like selling shoes on an island where everyone is used to being barefoot. If you are able to sell the concept, you have a huge untapped market,? says Devinder Kishore, director (marketing), Nokia India.
For Nokia, it makes business sense as it has already sunk in $8.1 billion in buying Navteq, the largest maker of maps used in car-navigation equipment. It is expected to add GPS chipsets to every handset in order to create the market for the digital maps of 69 countries it has acquired. Location-based services are one of the cornerstone of Nokia?s strategy to become the mobile internet platform of choice, from being a handset platform of choice.
Many others seem happy to piggyback as the Indian market opens up. This includes phone, as well as car markers. ?We have seen a very good start for personal navigation devices since we introduced them with high-end cars in December last year. After security system, it is the best selling electronic gadget in high-end cars,? confirms General Motors national manager (new business development), Rajiv Gupta.
Interestingly, the Indian market is one of the very few worldwide where mobile phones with GPS capability were the first to arrive on scene. Personal navigation device (PND) firms are confident that the phone companies will help create a market for them.
?You can compare it to cameras. Most of us still pack a digital camera on our holiday even though we are carrying our cellphones equipped with a camera,? says Rakesh Verma. He has a point. Not only do PNDs offer bigger screen size but most of them offer more detailed maps too.
Tax structure, however, is a hurdle as PNDs attract 34% duty compared to 4% duty on cellphones. Analysts like Canalys also expect standalone devices from companies like MapmyIndia, Satnav and Garmin to start picking up as the market grows.
Everyone is betting on prices to dip as the volumes pick up. Today, mobile phones with GPS capability and personal navigation devices (PND) start at around Rs 15,000. Most expect them to pick steam once the price comes below Rs 10,000. Around 200 to 250 euros will be an attractive price point for a market like India, according to Daryl Chiam.
Handset-makers seem to have stolen the thunder from operators, who have been talking of location-based services for long. The concept of locating users through a cellphone tower has now transmuted into using GPS chips. And the real action will begin when phone companies will join hands with operators and tag the users and advertise based on their location. ?To begin with, we are restricted to giving driving instructions. Later when operators join in, we could combine navigation features with location-based services to come up with ads according to the area you are currently in,? says HTC India country head, Ajay Sharma.
Several web 2.0 models are being planned. Analysts expect phones like iPhone to integrate navigation with web browser, address book and other features. You could search for way to places on your address book or share customised maps with your friends before inviting friends. Or it could become a social networking tool by alerting you when your friends are nearby, assuming they let you see where they are.
Several such business models are expected to emerge as cellphone vendors, digitised map companies, PND makers and automobile majors scramble to find their way through the fast-growing navigation market.