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Garmin is in BIG trouble!


jcc123
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Nokia is buying NavTeq. This is the last good map data company left after Tom Tom was smart enough to buy Tele Atlas. For a while now I've been thinking that Garmin should buy NavTeq so as to secure their map data but the CEO of Gamin clearly doesn't know what he's doing.

 

He puts his resources into making too many models and not using his expensive stock to acquire the even more expensive NavTeq. Now his future is very unclear. If he decides to continue to use NavTeq data, Nokia could jack up the price for us or they could decide to slow down the updates for Garmin customers. The could easily make the best data for only Nokia customers and give low tiered ones for the rest of us.

 

If he decides to start his own data company, it will take years and alot more money to do correctly than if he had just acquired NavTeq in the first place.

 

Folks, what we are looking at here is the beginning of the end for Garmin. A very good case study for the business schools oon exactly what NOT to do when you're a CEO of a major tech company. Most good tech company CEOs are really paranoid about their position while the Garmin CEO seems to have an attitude like he's got all the time in the world.

 

How can he be so dumb?!? It's like you're making razors and you let someone else control the blades while you make the handles. Duh?

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That's a lot of speculation.

 

I agree Garmin has to many models. However I can't overlook that they dominate the GPS market.

 

The change in NavTech's liscensing terms didn't work in Garmin's favor. They took a lot of heat. It would not suprise me to see that Garmin is working to develop it's own mapping division, or is working with other GPS makers to develop a stand alone mapping company that plays nice.

 

If it takes years to build your own mapping company, I'll lay odds that the current deal with NavTech that Nokia's going to have to honor covers the next several years...

 

When you get right down to it, if NavTech was so good, why didn't they acquire someone instead of being eaten by a bigger fish?

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I don't know that they are in big trouble, or any trouble at all for now. Garmin may well (probably does) have multi-year licenses with data suppliers that give it access to product for some time. That said, Garmin really does need to take more control of its products so it can set the license terms for its software products. After all, if the vendor changes in license terms adversely for Garmin customers, Garmin takes the heat. Over time GPS hardware is going to become generic and the physical and operating interfaces will standardize and become less of a selling point. For Garmin to stay on top, the company needs to control the major value added parts of the product, and maps are a big part of the value.

Edited by Great Birds
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I've been playing a virtual stock game online, and have around 280 shares in GRMN. The change hasn't updated yet but I lost a lot of my play money I'm sure.

 

EDIT: It just updated, I lost over $3,000, and I had 300 shares. Their stocks have dropped around 10%

Edited by Airmapper
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I was told by an acquaintance a few months ago that his brother works for a company that is involved with the software research on various projects where the most up to date maps can be directly downloaded and uploaded to GPSrs directly from satellites. He was speculating that the uploading of maps to satellites will only be available for the military and gov'ts use and would happen fairly soon, but that the satellite downloading of maps only, would probably be available to the general public. Of course, I'm sure it would be for a fee. As with all technology, as it progresses and grows the cost comes down dramatically.

 

So there are a lot of unanswered questions: will companies pay to be able to download their maps from the new satellites that will be replacing the older models; or will entirely new satellites for the transfer of world maps to GPSrs be used; will the gov't decide to be more involved in the distribution of maps especially since topos originate from USGS maps to start with and start offering the topos for satellite downloading (just like ordering paper USGS topos from the gov't now). The same could apply for aeronautical charts and marine navigational charts from their respective gov't agencies. Since gov't agencies do the actual upadating of these charts / maps they essentially control all future sales inorder to have the most up-to-date maps.

 

There is no question about it, that with the research that is going on, we will be seeing a new way of acquiring maps in a few years, as to exactly how and from who and at what costs only time will answer those questions. So the issue of NavTeq being bought may only be a short term issue for distribution of GPS maps; time will tell.

 

Anxious to hear other comments and view points.

 

edited for spelling

Edited by eaparks
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...Anxious to hear other comments and view points...

 

I do know that topo and arial maps are 'free' on the net. It's not much of a stretch to build an application that lets you put those into your GPS. It's already being done on a overpriced basis by some, but it won't take long for those maps to be free (they will charge for the software to match datum's etc) and utilized.

 

Updatable road maps...that would be fairy 'simple' with vector data. That's a new angle that I had not thought of. There is a lot of great potential there.

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...Anxious to hear other comments and view points...

I hope that they put in a faster downlink mechanism than the one that is in the current Navstar GPS. Your hand held unit today already downloads information from the satellites with information like time of day and "almanac" data like satellite position adjustments, etc. But the data is piggybacked onto the same signal that is used for range finding (ie. trilaterating your position on the globe) and is transmitted at a glacial pace of 50 bps -- yes -- 50 bits per second.

 

Let's see, mmmm... a single 1.0MB topo grid square would download over that link in a mere 46hr. 36min.

 

(edit to correct my math - 1.0MB = 1024*1024 bytes = 1024*1024*8 bits !)

Edited by wsgaskins
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...Anxious to hear other comments and view points...

 

I do know that topo and arial maps are 'free' on the net. It's not much of a stretch to build an application that lets you put those into your GPS. It's already being done on a overpriced basis by some, but it won't take long for those maps to be free (they will charge for the software to match datum's etc) and utilized.

 

Updatable road maps...that would be fairy 'simple' with vector data. That's a new angle that I had not thought of. There is a lot of great potential there.

The real value of companies like NavTeq and TeleAtlas does not lie in the maps themselves. (This information, as pointed out, readily available from municipal, state and federal government sources.) The real value is in all of the other GIS data that NavTeq et al. apply to their map databases (For instance, is the street one way or two way? What are the street addresses? Where are the gas stations? Where are the streets that appear to go through but don't really? and so on.) This is where GIS companies find differentiation and this is the information that is toughest to compile. And it's a big step for any newcomer to the market to take.

 

With respect to "updatable maps" the main issue has been an efficient means of distribution. So far, "DVD by mail" still wins the day. But if you can find a way to distrbute map data on a near realtime basis, there are people and companies who will gladly pay the monthly subscription fee. Yes, there is a lot of potential -- a fact that has not been lost on the companies who are working feverishly to make this happen.

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It just updated, I lost over $3,000, and I had 300 shares. Their stocks have dropped around 10%
You haven't lost anything if you haven't sold yet. Remember that half the people are buying at this price. The 145% run up in the Garmin stock price over the last year should take some of the sting out of any recent decline.
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Actually, this could be good for Garmin in the long run. If the articles are right that Nokia's interest in Navteq is in providing mobile navigation through their mobile phones for a small fee per transaction, then there is one thing they will have to do, and that is keep the maps very up-to-date.

 

It's one thing if my Garmin GPSr doesn't know about a particular road. We only bought it once and that money is gone. As long as we see the total value of the device is greater than what we paid, we live with the times it's wrong. But what if you were paying money for each time you navigate (which is what the article says Nokia wants to do with mobile phones)? Then, if it's wrong, you'll want your money back for that particular navigation. Never mind that it's not much money; you'll want it back just on principle. Just the processing of customer claims would cost many times the charge in question so poor maps could get expensive. Nokia will be under great pressure to support Navteq in keeping current map data available and that's a good thing for all of us.

 

One more thing. It's not in Nokia's best interest to alienate Garmin as a customer. They paid a very high price for Navteq and they need the revenue they received from companies like Garmin to recover some of their investment. They would surely like to charge Garmin as much as they can get away with (as did Navteq themselves), but they also know they'd be the ultimate losers to force Garmin to go elsewhere for map data. I really don't think this is going to be a problem at all.

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Garmin could follow suit with what Magellan is doing and start designing their GPSs to work with other mapping software. I think competition in mapping software will be a good thing and will drive sales up on the hardware as the maps get better as a result. I also think what LLOT said is true and maps will eventually evolve into a real-time monthly service. It is pretty cool to think what could be done when that happens.

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Not so sure this will be good for Garmin or the rest of us for that matter. From another site:

 

Rob Sanderson of American Technology Research said Monday that while there is "little to no chance" that Nokia would prevent access to Navteq's maps, the double-digit price declines that have benefited Garmin are likely over.

 

"Also, this deal shows Nokia is moving aggressively into navigation on phones and other devices," Sanderson said in an interview. "This is a competitive threat to Garmin."

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People who are shrugging off this move by Nokia is clearly not thinking straight. In business, it's very much like a chess game. Right now, Nokia has Garmin checked in 2 moves. Garmin will HAVE to step up and do something. The smart money knows this and that is why the stock is down so much. What Garmin COULD do is to make a counter offer for Tele Atlas which Tom Tom is acquiring. The price of that company is a lot lower than NavTeq. Off course, Tele Atlas is not as good as NavTeq, that's why Garmin dropped Tele Atlas years ago and went with NavTeq.

 

The fact of the matter is that service contracts usually have language that accounts for changes of control. Once Nokia closes on the deal they will be able to dictate the new terms. I will guarantee to all of you that it will not be pretty. I'm willing to bet that prices will go up. If that happens Garmin can respond three ways, look for a cheaper alternative, I don't know who that would be since there are basically only two companies (Tele Atlas and NavTeq), take a lower margin on the sale of these maps to their customers by assuming some of the costs, or pass the cost along to the customers which means we'll be paying a lot more for already pricey maps. Non of these options are positive for Garmin. Again, that's why the stock is down.

 

I can easily see Nokia slowly turning the screws to their competitors who rely on NavTeq's data. They will increase prices and most likely offer a tiered product which means that they save only the best and freshest data for themselves while selling lower tiered data to their competitors. What can Garmin do but to take it since they clearly took the easy way out by not taking control of their supply chain early in the game.

 

Like I posted earlier, Garmin's CEO clearly doesn't know what he's doing. Remember, he's an engineer by trade, not a businessman. They are doing well not due to his business acumen but because he stumbled onto the next "wave" of technology. He was at the right place at the right time. (I can't help but think of a Buffet quote when I talk about this because he said," invest in a business an idiot could run because one day it will be run by an idiot.") Just look at his product offering. It should be about quality, not quantity. By offering so many models with only a few minor functions separating each model, he's wasting all of his developer's time among all the various models. Instead, he should concentrate their efforts at making a few best of breed. Everyone here knows what constitute the "ultimate" in GPS technology. We all know what functions we salivate over. The question is why doesn't Garmin? For example, it took them years before they had enough sense to put expandable memory into their units after much complaint by customers, why? They're also slow in adopting new "best of breed" technology into their units. Whether it's better lower powered screens or more powerful low powered processors etc., they always take their sweet old time in making it happen. They should follow Apple's footsteps in pushing the technology envelope.

 

You can see that they took their sweet time in making a play for a map company too and now it will haunt them. This, to me could be a fatal move for Garmin. After all, what good are their units without good map data?

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I was told by an acquaintance a few months ago that his brother works for a company that is involved with the software research on various projects where the most up to date maps can be directly downloaded and uploaded to GPSrs directly from satellites. He was speculating that the uploading of maps to satellites will only be available for the military and gov'ts use and would happen fairly soon, but that the satellite downloading of maps only, would probably be available to the general public. Of course, I'm sure it would be for a fee. As with all technology, as it progresses and grows the cost comes down dramatically.

 

So there are a lot of unanswered questions: will companies pay to be able to download their maps from the new satellites that will be replacing the older models; or will entirely new satellites for the transfer of world maps to GPSrs be used; will the gov't decide to be more involved in the distribution of maps especially since topos originate from USGS maps to start with and start offering the topos for satellite downloading (just like ordering paper USGS topos from the gov't now). The same could apply for aeronautical charts and marine navigational charts from their respective gov't agencies. Since gov't agencies do the actual upadating of these charts / maps they essentially control all future sales inorder to have the most up-to-date maps.

 

There is no question about it, that with the research that is going on, we will be seeing a new way of acquiring maps in a few years, as to exactly how and from who and at what costs only time will answer those questions. So the issue of NavTeq being bought may only be a short term issue for distribution of GPS maps; time will tell.

 

Anxious to hear other comments and view points.

 

edited for spelling

 

That's not going to happen for a long, long time! The current constellation of satellites have very low power and thus wouldn't be able to do what you proposed. It's also one way which means that it will have no idea where you are at any given moment to upload the correct map set to you. The average power of these satellite broadcasts are about 60 watts. And they're doing this for miles up in orbit.

 

Unless the government puts up another constellation with much higher power and capacity, allowing for two way communication, its only a fantasy. Even if they are, which they probably are since we don't know what the defense department is doing covertly, you won't see the commercial applications for decades because it's top secret.

Edited by jcc123
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Unless the government puts up another constellation with much higher power and capacity, allowing for two way communication, its only a fantasy.

Wait a minute -- something just occurred to me.... Nokia makes mobile phones, which already have built-in 2-way communication capabilities with an ever expanding network of local, high power communication nodes.

So who's to say that the satellite has to provide you with updated maps? The satellites will continue to give you a position fix and then the *other* communications channels in your hand held device will have to go fetch the appropriate maps for your area. Heck, even computing routes could be offloaded to a high power computer on the cellular network somewhere and then only the map data long your suggested route would have to be loaded -- just in time for when you need it.

 

I don't see Nokia caring much about the person who is trying to navigate a back country trail on foot in the middle of the Sierra-Nevadas. It's all about the road maps.

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People who are shrugging off this move by Nokia is clearly not thinking straight. In business, it's very much like a chess game. Right now, Nokia has Garmin checked in 2 moves....

 

I would not call it shrugging off. Garmin has options. Nokia is taking a gamble. People think Nokia has made a good Gamble, People think it's going to hurt Garmin. Nobody knows the real truth yet. That's what the stock price is saying.

 

Case in Point.

For example. I like the Nokia N95. I'm not paying 700 bucks for the dang thing. Nor am I going to pay to use the GPS that I already paid for with the 700 bucks. Nokia's current strategy is that you don't own the mapping software. You lisence it for a period of time. In other words a Map subscription to add to the other services you can get with a cell phone. Sorry but I'd rather just have the map and be done with it. Garmin could create a GPS/Phone and start competing wiht Nokia and it would not suprise me if they do.

 

I'm not sure Nokia's gamble is going to be a winner for them. But they could drop the price of their phones, sell maps instead of rent them and get in the game. One Garmin dominates.

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Garmin could create a GPS/Phone and start competing wiht Nokia and it would not suprise me if they do.

 

I'm not sure Nokia's gamble is going to be a winner for them. But they could drop the price of their phones, sell maps instead of rent them and get in the game. One Garmin dominates.

 

Garmin can't do crap without maps. He who owns the maps AND the hardware owns the market.

Edited by jcc123
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Garmin could create a GPS/Phone and start competing wiht Nokia and it would not suprise me if they do.

 

I'm not sure Nokia's gamble is going to be a winner for them. But they could drop the price of their phones, sell maps instead of rent them and get in the game. One Garmin dominates.

 

Garmin can't do crap without maps. He who owns the maps AND the hardware owns the market.

 

So what's the problem? Nokia has said it would continue to liscence maps. Meaning Garmin has maps from NavTeq. No problem.

There are other maps in the world other than NavTeq, so Garmin has options.

 

Right now Garmin has maps, GPS, PDA, and no Phone, all of what they do make is good.

Nokia has maps, Phone, PDA, and GPS. The PDA is Symbian which is still suffering on acceptance and software and their GPS is rather kludgy.

 

Nokia has it all, but it's not won yet.

 

Your post tells us the fat lady has sung and it's all over but the crying.

I'm saying the opera has just got started, and she's nowhere near the stage yet.

 

So, would I buy a Garmin Smartphone, powered by Palm with Google maps? As it happens I'm looking for a smart phone and the N95 falls short...

Edited by Renegade Knight
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I wrote to Garmin several years ago about how the routing profile didn't work as advertised for DEM maps on my 60cs. I never got a response.

That was when I first realized that Garmin doesn't think things through. They were riding on a wave of tremendous sales. I was just an ant to be swept out the door. I happily have no sympathies for Garmin.

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...I happily have no sympathies for Garmin.

I don't either. Their GPSs are good, but all the ones with potential are now made by other folks. I have not been enticed to upgrade from my old one by any company though. They all have a lot of work for a truly next generation product rather than the Beta products that we are seeing.

 

Nokia is on the wrong track (my opinion) but they also learn and are not afraid to admit someone else had a good idea (iPhone) and build on others successes. So maybe Nokia may have a breakthrough GPS next...

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That's not going to happen for a long, long time! The current constellation of satellites have very low power and thus wouldn't be able to do what you proposed. It's also one way which means that it will have no idea where you are at any given moment to upload the correct map set to you. The average power of these satellite broadcasts are about 60 watts. And they're doing this for miles up in orbit.

 

Unless the government puts up another constellation with much higher power and capacity, allowing for two way communication, its only a fantasy. Even if they are, which they probably are since we don't know what the defense department is doing covertly, you won't see the commercial applications for decades because it's top secret.

Don't assume that the delivery of maps/GIS data is necessarily going to come over government-owned satellites. So far, the work that I know of is focusing on commercial satellites as the means of delivery. (Did I mention that this service would not be free...?) Furthermore, the general direction is that it is a logical extension of real-time weather and traffic services that you can get now (such as the StreetPilot 2730 combined with XMNavTraffic and XMWeather services...)

 

With respect to the need to know position data in order to deliver maps, this is an interesting thing and it depends upon your assumptions about how quickly you deliver updates and how much data is necessary in order to make updates. One company's approach does, in fact, rely upon two-way communication and knowing the position of the recipient (but note, this is a specialized niche that has been using two-way satcom for more than a decade...)

 

An alternative approach could be a broadcast scheme where updates are broadcast more or less continually -- there are several advantages to this approach (one-way transmission, for example) and several disadvantages as well (such as updating is "best effort" and there are no guarantees of when you will get the latest and greatest information for the areas that you have subscribed to...)

 

I would be surprised if you could not subscribe to such a service within 10 years.

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Unless the government puts up another constellation with much higher power and capacity, allowing for two way communication, its only a fantasy.

Wait a minute -- something just occurred to me.... Nokia makes mobile phones, which already have built-in 2-way communication capabilities with an ever expanding network of local, high power communication nodes.

So who's to say that the satellite has to provide you with updated maps? The satellites will continue to give you a position fix and then the *other* communications channels in your hand held device will have to go fetch the appropriate maps for your area. Heck, even computing routes could be offloaded to a high power computer on the cellular network somewhere and then only the map data long your suggested route would have to be loaded -- just in time for when you need it.

 

I don't see Nokia caring much about the person who is trying to navigate a back country trail on foot in the middle of the Sierra-Nevadas. It's all about the road maps.

And yes, let's not forget about terrestrial based comm... Most phones these days already have GPS (and they can take advantage of the known location of base stations to augment position data.

 

wsgaskins nailed it on the head, though. Lone hikers are not where the money is. It's all about roads (and anything else that people who drive on roads need -- such as destination information, real-time and historic traffic data, services enroute, etc.)

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What pops out to me is whether this technology goes the way of the computer hardware/software question. Years ago IBM passed on buying the operating system from MS because it was the hardware stupid. Wrong answer, software rules.

 

Is the same thing to happen here as well? Sure it's a smaller market but it's still a hardware/software issue. What will differentiate units in the future? Will hardware become generic while difference in application (maps) be the deciding factor for the consumer?

 

I don't know, but that's what my mind immediately went to.

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So what's the problem? Nokia has said it would continue to liscence maps. Meaning Garmin has maps from NavTeq. No problem.

There are other maps in the world other than NavTeq, so Garmin has options.

Fear of the unknown for one and the possiblity or liklihood that Nokia will be charging Garmin a lot more for the maps (they have to get their money back somehow).

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It makes me sick reading all this crap about how Garmin has goofed, how they will lose out, how everyone else is going to move ahead. Same stuff I've read for years. Same as listening to the Polaris ATV owners crap on Honda ATV's about how Honda needs to change their design. Yet Honda leads the market. Same story here. Garmin leads the market, and not by luck. They make a good product, stay ahead of the competition, and will do so again in this scenario. If the other GPS manufacturers offer so much more, then go buy them. And never mind what Garmin does. But most people still want Garmin. Why is that do you suppose? I doubt that it's because the others are better. If you don't like what Garmin does, buy a Magellan, or Lowrance, or whatever tickles your fancy. Why do people want Garmin to change features? They want garmin to customize their GPS for them!! Why do they want Garmin to add features that Magellan has? Because Garmin makes a better overall GPS and consumers want every friggin' feature possible. And they want it in a Garmin. I suggest that if Garmin is such a dumb company, then if Magellan has the features you want, go buy it, and don't worry about what Garmin does. By the way, I currently own a magellan Explorist 500, 500LE, Garmin Legend CX and Legend HCX, and Lowrance iway 100m. For automotive, I have the old Streetpilot III Colormap. The Magellans stay in the drawer unless a friend wants to borrow a GPS. Ain't near the quality GPS as the Garmin. magellan mapping sucks. User friendly software non-existent. Ruggedness - next to Garmin, no comparison. I do believe Lowrance is way ahead of Magellan. Garmin in big trouble?? I don't think so. Just a rant, only my humble opinion. Take it for what it's worth. Opinions are like a**ho**s, everybody has one.

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How does this announcement of Garmin-for-Phones today change the game?

 

http://www.engadget.com/2007/10/03/garmins...-gps-superstar/

 

From the press release:

Garmin today announced Garmin Mobile

XT, a unique, all-in-one software solution that turns select smartphones

with internal GPS into high-end Garmin navigators. This mobile phone

software application seamlessly pairs the phone's built-in GPS with

Garmin's software so that customers have the benefits of navigation

anywhere in North America or Europe. Unlike other mobile phone

applications, Garmin Mobile XT offers convenient preloaded maps and

includes access to dynamic content like premium real-time traffic alerts

and fuel prices, but does not require any monthly fees or subscriptions of

any kind.

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I skipped mapping updates for my Garmin StreetPilot for a third year now. Why??????? The mapping updates just didn't cut it for me. Garmin's Topo 2008, shows that Garmin just can't do the mapping. Ok, may be the big plan is to piggy back onto Nokia. The new mobile phone is Garmin's ace in the hold. Ya, right. :laughing:

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How does this announcement of Garmin-for-Phones today change the game?...

 

So much for Nokia taking over the world with a subscription plan. I wonder if it will make the Nokia N95 GPS work better than Nokia's own software?

 

You should go read Innovator's Dilemma. Many new technologies start out under the radar and having a "just good enough" quality to them. Soon they end up replacing the dominant players in the industry.

 

People like you might laugh at Nokia right now and how grossly inadequate their product is in term of being a GPS but they have the potential to destroy Garmin. If you look at Garmin, they're just not that competitive. They have very expensive products with just so so capabilities, certainly not a value proposition. If Nokia can come in and offer similar products at half the cost I'm willing to bet that many of their customers would bail on them in a minute.

 

The first wave of people to go would not be the hardcore people like those on this board. Casual users and automotive would be the first to bail. They also happen to be the biggest consumer market for the future growth of the industry. All I know is that technology firms that create the reaction of "meh" when they introduce products are not doing it right. There's no wow factor in Garmin's products. I think there's room for someone to come in the clean their clock.

 

Nokia is clearly very interested in doing so. Securing the critical data needed to produce great GPS for the mass consumer market is the right first step. I think they overpaid but that's an entirely different story. But I think Nokia will use the data as a competitive edge for them to take market share away from Garmin.

 

BTW, Garmin's stock is continuing it's slide. It proves that my initial thesis is correct as the smart money has figured this out too.

Edited by jcc123
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It makes me sick reading all this crap about how Garmin has goofed, how they will lose out, how everyone else is going to move ahead. Same stuff I've read for years. Same as listening to the Polaris ATV owners crap on Honda ATV's about how Honda needs to change their design. Yet Honda leads the market. Same story here. Garmin leads the market, and not by luck. They make a good product, stay ahead of the competition, and will do so again in this scenario. If the other GPS manufacturers offer so much more, then go buy them. And never mind what Garmin does. But most people still want Garmin. Why is that do you suppose? I doubt that it's because the others are better. If you don't like what Garmin does, buy a Magellan, or Lowrance, or whatever tickles your fancy. Why do people want Garmin to change features? They want garmin to customize their GPS for them!! Why do they want Garmin to add features that Magellan has? Because Garmin makes a better overall GPS and consumers want every friggin' feature possible. And they want it in a Garmin. I suggest that if Garmin is such a dumb company, then if Magellan has the features you want, go buy it, and don't worry about what Garmin does. By the way, I currently own a magellan Explorist 500, 500LE, Garmin Legend CX and Legend HCX, and Lowrance iway 100m. For automotive, I have the old Streetpilot III Colormap. The Magellans stay in the drawer unless a friend wants to borrow a GPS. Ain't near the quality GPS as the Garmin. magellan mapping sucks. User friendly software non-existent. Ruggedness - next to Garmin, no comparison. I do believe Lowrance is way ahead of Magellan. Garmin in big trouble?? I don't think so. Just a rant, only my humble opinion. Take it for what it's worth. Opinions are like a**ho**s, everybody has one.

 

I have never heard that Garmin goofed big time before this. In terms of your comparison to the ATV market, it's not analogous. It would be like if Honda didn't make the engines for their ATV's and suddenly Polaris buys the engine maker from under Honda. Do you think that's game changing for Honda?

 

In a sense you're right that we shouldn't care because we will have to replace these units every few years anyway and by the time Nokia or anyone else emerges as the victor, we would have most likely moved on to another brand. However, I find it interesting because I'm a money manager and look at these things as a way to profit by making the right calls.

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I, for one, have been very pleased with Garmin products and service for more than ten years. They have not been perfect in their products, or service, but I consider them exceptional. I'm considering the purchase of another Garmin unit now, just as a vote of confidence in them. I'd rather support them now and keep them viable, rather than lose them as an option if they get eaten up by Nokia. Just a thougt.

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I gotta throw my opinion in on this.

 

Nokia won't engage in anticompetitive practices like "putting the screws" to any of Navteq's customers.

 

Instead, they'll just include Navteq data in their own products for "free". As in beer. That'll make them more competitive.

 

And who's to say that Garmin stockholders won't MAKE money on the Nokia/Navteq thing? Many of them probably have Navteq stock too.

 

Maybe Garmin should acquire SiRF...

 

And maybe they should fix their website so I can update my City Navigator North America V8 that I have on my 60Cx with the 2008 Update...

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...People like you might laugh at Nokia right now and how grossly inadequate their product is in term of being a GPS but they have the potential to destroy Garmin. If you look at Garmin, they're just not that competitive. They have very expensive products with just so so capabilities, certainly not a value proposition. If Nokia can come in and offer similar products at half the cost I'm willing to bet that many of their customers would bail on them in a minute.....

 

Actually, I like the N95 but for three things. The GPS implementation, the lack of a touch screen, and the price. Garmin is expensive, but so is Nokia. If Garmin comes out with a smartphone PDA (not impossible) that would put them as one of the players just like you think Nokia is. A Garmin N95 killer would steal a lot of Nokia customers.

 

Competition works both ways. The jury is out on this deal. That remains my point.

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Yeah - what's the point of acquiring such a huge company IF you're gonna put the screws to its biggest customer? They're spending 8.1 B-B-B-B-BILLION DOLLARS on NavTeq. Probably half of that company's revenue comes from Garmin. Lose Garmin's business, and they won't have much of a business! I think maybe Nokia may be paranoid that someone else might make a play for NavTeq and squeeze them out of the game completely.

 

If things go awry, Garmin could resort to open source mapping as a possible solution.

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I gotta throw my opinion in on this.

 

Nokia won't engage in anticompetitive practices like "putting the screws" to any of Navteq's customers.

 

Instead, they'll just include Navteq data in their own products for "free". As in beer. That'll make them more competitive.

 

And who's to say that Garmin stockholders won't MAKE money on the Nokia/Navteq thing? Many of them probably have Navteq stock too.

 

Maybe Garmin should acquire SiRF...

 

And maybe they should fix their website so I can update my City Navigator North America V8 that I have on my 60Cx with the 2008 Update...

 

I thought this was interesting. Here is a Yahoo percentage of change chart of the 3 companies mentioned stocks. I believe the jump on Monday is in response to the buyout. Both Nokia (BLUE) and Garmin (RED) go down, and SiRF (GREEN) goes up. (Related or not I don't know?)

 

capturejg5.jpg

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People like you might laugh at Nokia right now and how grossly inadequate their product is in term of being a GPS but they have the potential to destroy Garmin.

 

 

Come on! Garmin just spent a boat load of money upgrading one of their aviation research facilities in Oregon. Talk to the guys there and they'd be happy to tell you that Garmin, the leader in aviation GPS-type products, is doing extremely well and that the "real" money comes from those products.

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Nokia's motivation was to stay ahead of Apple and the iphone. Adding GPS mapping ability was important for that. At no point was Garmin ever mentioned except in the blanket statement of maintaining service to existing companies.

 

Nokia is a cell phone company and competes with them. The ultimate limitation in cellphone GPS map technology is that the mapping will be good where there is cell service available and won't work elsewhere (straight coordinate would of course). Its a lot like Google maps on a PDA, great where WiFi or cellular is available, totally unavailable elsewhere.

 

To add full GPS service, like a Garmin Etrex, means adding about $200 to a cell phone and increasing its size for the additional electronics. Since Nokia's core business is cell phones, to do that is not a competitive move at this point.

 

JD

Edited by JDandDD
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Nokia's motivation was to stay ahead of Apple and the iphone. Adding GPS mapping ability was important for that. At no point was Garmin ever mentioned except in the blanket statement of maintaining service to existing companies.

 

Nokia is a cell phone company and competes with them. The ultimate limitation in cellphone GPS map technology is that the mapping will be good where there is cell service available and won't work elsewhere (straight coordinate would of course). Its a lot like Google maps on a PDA, great where WiFi or cellular is available, totally unavailable elsewhere.

 

To add full GPS service, like a Garmin Etrex, means adding about $200 to a cell phone and increasing its size for the additional electronics. Since Nokia's core business is cell phones, to do that is not a competitive move at this point.

 

JD

 

Huh? I think you're mixing apples and oranges. The chipsets needed for GPSs can be tiny.

 

Again, go read Innovator's Dilemma. Many technologies emerged as barely adequate solutions which ended up dominating the industry later.

 

Nokia is certainly focused on making phone handsets but they made a brilliant move by acquiring a company that would allow them to control an emerging market, namely, consumer GPSs. By having the map data, they will first incorporate GPSs into their phones with accurate maps. This makes it difficult for other phone makers who are their initial targets to have accurate maps on their units since they will have to go through either TomTom or Nokia. Soon, many consumers start to use their Nokia phones as convergence devices because it becomes as good as Garmin's lower end units. Nokia could decide at any moment to then enter the consumer GPS market completely as the hardware business is not very different from the phone handset business. At each point, there's not a dadgum thing Garmin can do to retaliate. They can retreat more into their aviation division but if they do that, they will always be a niche player. The consumer market is the largest. That's a lot to give up.

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....Many technologies emerged as barely adequate solutions which ended up dominating the industry later....This makes it difficult for other phone makers who are their initial targets to have accurate maps on their units since they will have to go through either TomTom or Nokia....

 

I've combined two of your thoughts. Don't think that TomTom or Nokia are set. Garmin, Magellan, Delorme, Brunton,m Google, MapQuest have a vested interest in good maps. They are well aware of the limitations (since we all complain about them) of the existing map companies and are fully capable of creating another player who, would, be almost guranteed a dominate position in the market.

 

You said earlier it would take years to catch up. Maybe true but that brings up up to the first part of what I quoted. While Nokie is fumbling for a GPS solution that works. Garmin woudl fumble with antother map company.

 

It keeps coming back to the same thing. Garmin has time, Nokia needs time. For all I know both are going to kick butt.

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I share that sentiment. I'd like to see a direction with Nokia and a strategy with Garmin. I see Garmin stock creeping back up, with analyst recommendations to "hold". I also see Nokia as a "strong buy". But..... I don't see a clear direction with either one. I think we have to next year to see where this is going.

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The real issue is convergence and not access limitation.

 

Nokia has no interest to limit Garmin's access to NavTeq content. That's not just bad PR but also risks in the GPS device makers getting together to develop an alternative solution. It is better to keep them going as they are right now.

 

Instead, play the convergence card. The actual GPS receiver chip is tiny and cheap. In Japan, almost every phone has one built-in already. Add the right user friendly software to that and the mainstream GPS will converge on the mobile phone. Just as your wallet, your train ticket and walkman all converge on the mobile phone. It has already happened in Japan!

 

Nokia will take the mass market with this. Consumers will no longer desire to buy Garmin devices and that is what damages the company. Garmin will have the hardcore climbers and nautical navigators left to them, but looses out on the big scale mass.

 

There is so much more you can do with GPS once you have a communication capability added that the traditional GPS receiver will feel like horse carriage compared to a car. You wouldn't want it in most occasions.

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Could someone please explain to me the value that NavTeq has? They provide mapping data right? Isn't all this stuff available for Free (or at worst for some licensing cost) from various governments? Its not like NavTeq went out and collected all the data themselves.

 

I know for a fact you can get pretty much all of the data available on the NavTeq maps in Canada from the Canadian Government (with the right to redistribute it). I'm willing to bet you can get similar things in the states and overseas (maybe not free, but at least for a license).

 

If you want to get nearest gas station/shopping mall etc, just get a digital phone book (again, I'm sure the data is available...) and geocode the addresses based on the mapping data.

 

Why on earth would all of this take years to do?

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Could someone please explain to me the value that NavTeq has? They provide mapping data right? Isn't all this stuff available for Free (or at worst for some licensing cost) from various governments? Its not like NavTeq went out and collected all the data themselves.

 

I know for a fact you can get pretty much all of the data available on the NavTeq maps in Canada from the Canadian Government (with the right to redistribute it). I'm willing to bet you can get similar things in the states and overseas (maybe not free, but at least for a license).

 

If you want to get nearest gas station/shopping mall etc, just get a digital phone book (again, I'm sure the data is available...) and geocode the addresses based on the mapping data.

 

Why on earth would all of this take years to do?

 

The maps are free. How they are organized and information stored about what you are looking at, so you can route on them plus all the points of interest and other information contained in the maps that "Bring them alive" is what a company like NavTeq would have. That's where their value lies. Someone like Google could make thier own maps (those Google Vans driving around) and has the $ to do it fairly quickly...

 

A start up would have to take some time to get their ducks in a row and fund the work to get all that information set up.

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Main asset is (i) autorouting data (with one-way streets, turn lanes, overpasses, entrance ramps, etc. this is not trivial), which often takes wheels on the ground to develop and (3) some 6 million + "points of interest" which requires constant updating, plus geocoding to plot. I would expect that there is a lot of effort involved all around.

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