Google’s My Location has really milked the media machine this week, certainly an accomplishment for incorporating a decade-old technology into Google Maps. Sure, there’s bound to be some confusion and ignorance from writers and readers alike, but I was floored by some of the reactions. How ’bout this headline from Om Malik: With Google’s My Location, Who Needs A GPS? Gee, maybe anyone who wants to get accurate routing (navigation)? Cell-ID positioning works fine for local search (read: finding the nearest Starbucks) in densely populated areas where accuracy can be as good as 500m, but in suburbs and rural areas where cell towers are spread out, it could be closer to kilometers. Countless wireless carriers and application developers have attempted to leverage this technology with little success due to its low accuracy.
I subscribe to Minyanville’s Buzz & Banter ticker and my jaw dropped when I read a post this morning from options analyst Jon Najarian titled Google Developing Mobile Competitor to GPS: “What isn’t GOOG going to own going forward? Reports on sites like VNUnet.com say the search giant is developing a competing mobile navigation system to tap the multi-billion dollar GPS market.” Really? Apparently even the Street analysts are blinded by the Google Machine into believing that everything they announce is homegrown and/or new. Yikes.
Lest you think I’m completely sour grapes on this, using cell-ID will be a useful supplement to GPS since it works indoors, uses less battery power, and has a faster “fix” time. Same will happen with WiFi positioning. Nice feature, but please put down the Kool-Aid, everyone.
Something happened in the mobile turn-by-turn space a few weeks ago that didn’t get a lot of play in the news. But it was a shift that I saw as game-changing. Not a new feature or distribution channel, but a new price: sub $5.
MapQuest, in partnership with Telmap, is now selling MapQuest Navigator 5.0 to consumers through a new direct-to-consumer storefront on MapQuest.com. Customers who subscribe before December 31, 2007 can download the application directly to their handset and purchase the service for the “promotional price” of $4.99 per month for the life of the subscription. This new version is available for several Blackberry devices for Sprint, T-Mobile and AT&T customers.
At this price and with the included set of features, Mapquest Navigator might capture a new segment of customers that is not willing to pay the industry-standard $10 a month. Indeed, a poll by Harris, conducted in May and June 2007, shows that with a price set at $11.99 per month only 4 % are extremely likely/very likely to subscribe; at $8.99 they are 6% and at $5.99 it grows to 19%. (read more here). Just one question: are BlackBerry owners that price sensitive? I’m inclined to think that they’re chasing the wrong segment with price cuts. The Telmap guys are sticking with the “promotional price” story, but we all know that it’s nearly impossible to raise the price on consumers (just ask GM about their 2005 discounts). At $5/month, there’s not a lot of pie to go around: application developer (Telmap), brand (MapQuest) and content provider (Navteq). Gotta sell a lot of apps at that margin…
