As I was describing in a previous post, Apple approach is to build a fully integrated business model from the chip to the application distribution on your device.
If we imagine Apple pursuing this approach in 2011 and beyond what could their next move? With a $50B treasure chest it opens up some nice opportunities.
If they want to move up stream in the value chain, Arm might be the right target. They would then control the microcode and the design of their A4 chips as well as most of the chips outside of Intel x86 architecture. This acquisition would create a real electroshock in the mobile industry to say the least.
If they want to move downstream TomTom might be another right target. They would enter the PND market maybe not the most flourishing one, but still a large one. By buying TomTom they would grab TeleAtlas one of the 2 providers of maps to the industry. The other one, NavTeq beeing the property of Nokia. This would give them a competitive advantage for the iPhone. They would be able to give away a nice navigation service and a bundle it with their obile app engine.
Let’s keep tuned, Apple is due to swallow a big fish in the coming months.
PND experience is quite clumsy: you need to fix the cradle arm on your windscreen, put the PND cradle on the arm, and then plug in the CLA.
So far the only alternative has been to buy a car with an embedded navigation system. But these systems are usually not as good as a PND, more expensive and available only on the most expensive cars.
Renault ad with TomTom
TomTom is trying a new approach to sell its PND with Renault. TomTom PNDs are offered as an option on middle range Renault cars. What is really new is that Renault has introduced a cradle in the dashboard. So it’s not a classical embedded solution but a way to improve the PND experience. The TomTom PND is still a device that is plugged in and out in the dashboard removing the hurdle of the cables and arms.
Renault Dashboard with TomTom
I find this approach very smart and very flexible. Your PND is still affordable, removable, from a famous brand and the UX is seamless within the car.
With the introduction of the universal charger for mobile phones, let’s hope car manufacturers are working on similar solution to improve the in-car mobile experience.
The Garmin NuviPhone finally hits the shelves in Asia . The device has been nicknamed Neverphone because it was announced at the Mobile World Congress 2008, so nearly 18 months ago. I was on the edge to close a deal with Garmin in 2008 to embed their software in the Toshiba devices when they annonced their Nuviphone. Of course we stopped the discussions as it is not comfortable to compete with one of its suppliers. 😉
This time Garmin has teamed up with Asus to produce it and it comes preloaded with satellite navigation software and maps. Basically is no more than a phone bundled with a satellite navigation software as you can find already many from HTC, Toshiba or other manufacturers. Nothing really new except the brand which is one of the most famous in the PND space.
I’m a bit doubtful of Garmin’s approach as their Nuviphone will compete with Operators’ navigation services and Operators control nearly 85% of the handset market in Western Europe.
As the ASP (Average Selling Price) of PND (Portable Navigation Device) is dramatically falling, legacy PND manufacturers such as Garmin and TomTom have to adapt and re shape their strategy quickly.
TomTom the other big player in the PNDs is changing its market approach too. After having left the smartphone space in 2008 they are back with the 1st satellite navigation software for the iPhone. It is a very clever move as TomTom is not so strong in North America, where they are struggling behind Garmin.
But the most interesting move from TomTom is their LIVE SERVICES. TomTom is trying to sell connected PND, i.e. PNDs with a 3G SIM Card, and the services directly to the end user. They buy the SIM card and data traffic from the mobile operator at a wholesale price and sell the connectivity and the services embedded in the device. The services encompass:
- real-time traffic information on motorways and secondary roads
- fuel prices in real time
- local search with Google
- weather, etc.
The challenge is really a test for the whole mobile industry as, if it was to succeed, it would prove that it is possible:
- to switch a business model from a hardware based to a service based business model
- to compete with mobile operator in the connected service space which they consider their private backyard
Both 2 things, no other player has been able to do successfully as of today.