TomTom: Why smartphones won't destroy our business

TomTom: Why smartphones won't destroy our business

Summary: TomTom's senior VP of market development says portable navigation devices are alive and kicking--and getting smarter, with Wikipedia-like consensus and intelligent routing.

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GPS devices going the way of the pay phone? Hardly. According to Tom Murray, TomTom’s senior vice president of market development, there are a number of reasons a portable navigation device trumps the navigation tools on a smartphone. Plus: TomTom’s devices are getting smarter by harnessing data from their users, leading to Wikipedia-like consensus on maps and intelligent routing. I talked to Murray last week.

TomTom now has an iPhone app ($49.99). But since iPhones already have GPS, isn’t that redundant?

If you look at the global market for GPS devices—TomTom, Magellan, Garmin—it’s clear that consumers prefer the approach we’ve taken: turn-by-turn navigation. So we’ve made available to iPhone users the same navigation tool, which is the best in the market, independent of platform. It becomes a question of what the consumer is motivated by and what sort of experience they are hoping to have. If you use the built-in iPhone app, it’s a different quality of maps, different routing process.

With GPS-enabled smartphones, how are stand-alone GPS devices still viable?

This is a question I’ve heard a lot over the last couple months with the advent of Nokia’s approach to navigation. There’s been no market impact on the demand for stand-alone GPS devices. We have sold 40 million devices worldwide. Dedicated portable navigation devices—PNDs—offer a number of advantages:

  • Screens: In the PND business, over 80 percent of the devices sold today have 4.3-inch touch screens or bigger. When navigating in the car, the consumer has voted for a larger screen size, versus a 3.5-inch smartphone screen. This allows them to see more of the map and directions on the screen.
  • Audio: Despite the importance of screen size, ideally , we want people to be looking out their window when they are driving. So the quality of the audio allows them to listen to clear, loud, spoken instruction. The audio you're getting from smartphones is a little less loud and tinnier.
  • On-Board Maps: There is the question of whether the maps are on-board (built into the storage of the device) or off-board (downloaded as you’re navigating). A lot of the smartphones are off-board, downloading in real time, which means you’re subject to a dropped call or roaming charges. For us, it all resides in storage in the device, so even if there’s no cell service, you will have your maps.
  • Battery: I use my iPhone to navigate, and turn-by-turn navigation tends to exhaust the battery compared to making phone calls or writing emails. The stand-alone battery lasts three to five hours.
  • Mounting: You need a place to mount the phone—it’s not a small issue. One of the principle advantages of a dedicated device is that they all have mounts to attach to your window or dashboard. If you don’t have a similar mount, you need to buy one, or you risk using it in a manner that’s less than ideal.
  • Sharability: Most consumers recognize that a portable device is sharable in their household. They tend to use a phone’s navigation as a backup. Or they’ll use it for pedestrian application: They use the PND to get a neighborhood and use their phone to walk to the restaurant.

What is TomTom doing to stay competitive?

We continue to add functionality and features. We’ve just launched the XL 350 and XXL 550 series. We’ve simplified the user interface of the product, making sure menus are easy to use. Versions of the XL and XXL come with lifetime maps and lifetime traffic services [for an additional $30 each]. It’s future-proof.

You recently introduced voices of race car drivers. How many words or phrases do they have to record to be able to provide an unlimited number of navigation instructions?

With those voices, they’re not speaking phonetically every sound and every street name. There are 70 recorded navigation instructions. There is programming that allows text-to-speech, so the voices can read anything. We also just introduced Star Wars voices, like Darth Vader.

What is next in the GPS industry? Is there anything beyond directions, traffic warnings and gas stations?

One of the primary challenges in this industry is that the world doesn’t stand still—18 percent of the nation’s road information changes every year. We were buying maps from TeleAtlas and NAVTEQ. The business model is such that the consumer would have to buy a map update. So we introduced TomTom Map Share. If you’re driving along and there’s something missing or incorrect, with a couple taps, you can report the information or make the correction on your own device as an overlay. You can share the change with the TomTom community and download changes others have made. Since 2007 we have gotten over 11 million map corrections. When the Minneapolis bridge fell, within a couple hours, we had a number of user-generated changes that the bridge was no longer there. This also fundamentally changes the way we develop maps. When TeleAtlas and NAVTEQ build maps they have a mobile fleet of mapping vans that traverse roadways. By using the community (not exclusively) we can focus far more of our energy on validating changes. It would take the fleet of TeleAtlas vans 11 years to drive across Europe. It takes about 11 minutes for TomTom users to drive it. In a Wikipedia-type way, we’ve harnessed the power of the community.

We are also building intelligent routing into our devices (IQ Routes Technology). We were developing algorithms that look at the shortest distance between A and B, based on the posted speed limit. It says you will be there in 40 minutes at 60 miles an hour, but in rush hour, it might be 6 miles an hour. So when you buy a TomTom, it’s triggered to ask whether the user is willing to share, anonymously, information to improve navigation. About 90 percent say yes. We now have 4.5 trillion bits of data from our users. You can take that massive data and break it down to time of day and day of the week, so we can give you real information about how long a route will realistically take. It’ll calculate the fastest route, which may be different at different times of day. We’re also using all this data to start working with the automotive industry [to make cars safer]. We aren’t dabbling in this. We are focused on automotive navigation.

Images: TomTom

Topics: Mobility, Hardware, Smartphones

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31 comments
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  • Built in TomTom

    The future will be build in dedicated navigation for cars.

    Multi-function devices are a compromise and thus suboptimal.

    Built-in rather than removable, because smash and grab thieves steal navigation things, I notice that when cars started coming with odd shaped custom radios, nobody smashes the window to steal them anymore.
    The market for radios was because there was a standard slot filled with a crap unit, creating an aftersale market.
    guihombre
    • <a href="http://www.tran33m.com/vb/f82.html">iphone</a>

      @guihombre I agree with TomTom. I have a Magellan and my wife has a TomTom. I like the larger screen and larger speaker on the Portable devices. With caps on some data plans and some carriers charging for GPS. I am perfectly happy with the standalones. I believe this using the phone for a GPS is a fad. Just my opinion.
      frankts
      • <a href="http://www.tran33m.com/vb/f81.html">blackberry</a>

        @frankts However, my wife uses or try to use one; she always get messy, lost and confused. I love her but the only place where she is never lost are the shopping centers. When I drink and she has to drive my drunkenness vanishes magically. So I reckon it was made for confused ladies... no offense of course.
        frankts
  • delusional

    totally delusional but what is the poor fool supposed to say: the multifuntional smartphone will be good enough for most users. outside of some small niches we won't stand a chance against free turn by turn (nokia and android devices) or almost free (iphone). with 4'3 inch smartphones already on the market and advances in battery tech in a few years standalone navigation devices will be gone.
    banned from zdnet
    • More convergence, more interoperability

      @banned from zdnet. Mostly agree with bfz. I foresee more services linked between phones and cars - perhaps something akin to a display that not only shows radio and car information (speed/RPM/Gas gauge), but also phone info, and data streaming from the phone through 3G/4G networks such as map data, traffic news, perhaps even travel advertisements for hotels/restaurants/gas stations/amusement parks.
      rock06r
    • No way!

      @banned from zdnet, I barely get a day out of my phone's battery anymore. Why the hell would I use it to navigate? Dedicated GPS units I foresee will be embedded into the dashboard themselves. Especially with Sync tech like Microsoft has in a few Ford models right now. Look for more of that kind of functionality in the future.

      Smartphones will kill GPS units like they killed the laptop. Oh wait, they didn't.
      The one and only, Cylon Centurion
      • RE: TomTom: Why smartphones won't destroy our business

        @NStalnecker

        I use my Android phone with the 12V adapter plugged in, and it lasts as long as I need it to. Turn-by-turn nav works perfectly while I listen to my MP3 collection simultaneously.

        I don't see any need at all for a standalone device. The very fact that this interview is even here is a sign, to me, that they're in trouble.
        clfitz
    • Have to disagree again

      My smartphone stays with me, my car goes with me or my wife. Neither of us wants to have to carry a big screen device just to navigate the car.
      So I reckon smart phones will get thinner and smaller, navigation devices will integrate better into the car (e.g. measuring the wheels turning etc.) and for the cost of it, no car will come without built in navigation in future.
      guihombre
  • Why I have a TomTom and a smartphone, and how I use both

    Murray makes excellent points. The smartphone is replacing pedestrian GPSs, the very small pocket sized units originally popular with hikers and hunters.

    I specifically avoided a built-in GPS for my new car bought last month. Why? Built in GPSs for the most part, suck. The maps are older and very expensive to update, the interfaces are clunky and not user-friendly, many do not have traffic feeds, or if they do, they use limited RDS based traffic. Few have the advanced features Garmin and TomTom offer. And some built-in systems are still using DVDs as the data source. Easy to update, but large, bulky, and slow compared to an SD card based solution. My inexpensive TomTom XL 340S LIVE offers phenomenal features.

    I use Google Maps on my Blackberry when I am out of my car. I don't have to worry about slow screen updates when traveling at walking speeds. And I don't use it for hours on end.

    As for theft, when portable auto GPSs were $500 devices, theft was a problem. I think it is less of a problem now that they are $150 devices.

    I think the future should be built-in navigation systems, but I would like to see TomTom and Garmin partner with the auto manufacturers, and offer feature-rich solutions with either XM or Internet based data feeds, and easily and affordably updatable via SD memory cards for operating program and maps.

    With all of the cellular service vendors going to capped data plans, I do not see how smart phones can replace portable GPSs any time soon, unless maps are downloaded and stored on the phone in a micro SD card, which the iPhone does not have.
    meh130@...
    • So far, built-in devices are often poor, and cell phones...

      @meh130@... so far built-in devices are often poor, as auto manufacturer model design begins years before sales, and by the time the car is ready for purchase, the nav system is several generations out of date (know that from personal experience!). So, unless the auto manufacturers can offer something competitive with CURRENT nav design (and at a reasonable price!), I doubt that will be the best solution for most.
      As for cell phones, unless they can effectively multitask, how am I going to use nav features, and input an address or other info while I am on the phone getting the information? So, let's see - our smartphone will need a big screen, excellent touch screen keyboard for entry in the car, multi-tasking to be in nav functions while on the phone getting those directions, mounted securely in front of the driver, getting power/charge from the car, full map database on board to avoid dropped calls/network congestion, etc. etc. - that's why at least for the near term, dedicated devices will be there for a good nav experience.
      randysmith@...
  • RE: TomTom: Why smartphones won't destroy our business

    Smart Phone + Cell Data Connection + GPS + Google Earth - TomTom = Perfection!

    When is someone going to realize that gas stations are a perfect place to have pay-per-sheet laser printers for mobile devices?
    tburzio
    • RE: TomTom: Why smartphones won't destroy our business

      @tburzio Or better yet, at a Kinkos, Walmart, CVS/Walgreens, or 7-11.
      Mwendo
  • Question

    I don't have a smart phone, so can someone answer this question: when you upgrade to a new phone, do all your downloaded apps (i.e., TomTom) get ported over for free or do you have to pay to re-download them again?

    If it's the latter, the a dedicated GPS device is preferable since you own it for good. Plus as mentioned, there are no data/roaming fees and you can share the device with friends.
    Mwendo
    • RE: TomTom: Why smartphones won't destroy our business

      @Mwendo <br>I have a Verizon Droid with an unlimited data plan. It uses a built-in GPS, which is free, and with the unlimited plan I've never incurred a data charge.<br><br>As for porting other apps, I think some will let you transfer the registration as long as you keep the same platform, but if you move to, say, a Droid from a Blackberry I doubt it. There are an awful lot of free apps for Android, though, and some of them are better than paid-for equivalents. I paid $20 US for a checkbook app, for instance, and switched to a free one that works better.
      clfitz
  • RE: TomTom: Why smartphones won't destroy our business

    Race car driver voices? Really? That's gonna keep you relevant in the marketplace? Dude...

    Smartphone + USB/power port connector = no battery issues.
    HeyBud
  • RE: TomTom: Why smartphones won't destroy our business

    Map updates are a huge rip-off in AU at least. When I bought my Go930 it had world maps, if I wanted to upgrade all of them it would cost me many times the original price. Heck, even an update of AU maps alone cost too much -- instead I opted for another brand with brand new maps and less spend than updating the TomTom. Without TomTom addressing the map upgrade costs, my old Go930 will just end up gathering dust.... give me a fair price and I might update the maps.

    Buy another TomTom? Not on your life with the current map upgrade costs... once bitten, twice shy!
    andrew.mcglashan@...
  • TomTom ? Out of Business?

    TomTom ? Out of Business?

    Smartphones will destroy TomTom?s business!

    Five FALSE answers of TomTom Murray;

    Screens, audio and headset plug-ins will be everywhere. In your car, trains, busses, boats, airplanes, hospital waiting rooms, schools etc.
    On-board maps; will with enlarged capacity of Smartphones (32GB++++), not be the bottle neck. Alternatively there is 3G, UMTS and faster technologies for 24/365 online!
    Batteries can be charged in cares, airplanes etc., and will have better performance in the near future.
    Mounting? A simple clamp, velcron or window mount, one can buy for a couple of bucks.
    Sharability; there is nothing to share everyone has his/her own Smartphone!

    Not so smart TomTom or simply; StupidStupid!

    see also; http://www.carevolution.eu/publications.html
    christian@...
  • RE: TomTom: Why smartphones won't destroy our business

    I never wanted to spend the extra $$ on another device and Sprint Navigation on my old MotoQ always worked well enough. And now that I have the EVO, I sure won't be spending extra on a dedicated device.
    And hey, I'm sure they still make maps on PAPER! Not as convenient, but will get you to an address.
    phswartz
  • RE: TomTom: Why smartphones won't destroy our business

    I am not convinced. Single-purpose devices will not exist in the near future...including the Kindle and all those other eBook readers. Convergence platforms like the iPhone and any Android-powered phone are and will continue to be the desired gadgets of choice for an increasing amount of users.
    asg749d
  • TomTom is talking crap!

    Everything they say isn't true, at least when we consider the iPhone/iPad as the navigator.

    > Screen: If you have any complaints about the screen, get an iPad! 11.5 inch with 3G and Wi-Fi.
    > Audio: Plug your iPhone on the TomTom accessory and let the audio pass trough the audio system of your car.
    > On-board Maps: The iPhone app is a giant clump of maps. Everything is on-board already!
    > Battery & Moutning: Get the accessory and you don't have any trouble.
    > Share-ability: I prefer an iPad/iPhone only to a combination. At least you don't have to worry to have the TomTom device stolen from your car. You wear the iPhone/iPad with you. And I didn't even begin about what happens if the device is stolen: if you lose your TomTom, you buy both the device and the maps (+ software). If you ever lose your beloved Apple, you just buy a new one and you reinstall everything. And don't even begin with the "Find my iPhone/iPad" feature.

    Seriously, why does TomTom talking shit? Even on the smartphone they're earning a lot of money, even if you don't consider their own accessory.
    ctxppc