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Tuesday, October 26, 2010

Why the Sat-Nav Application Model is Broken

James Rosewell writes:

Over the past 3 years TomTom and Garmin have started to morph from companies that sell physical devices into software companies providing applications to run on other people's mobile platforms. Navigon and Co-Pilot have skipped the physical device stage entirely and established themselves as reputable Sat-Nav application providers. Free services from Google and Nokia have enjoyed huge success providing basic Sat-Nav services to their customers. Sat-Nav as a mobile application is enjoying huge growth as the barriers to access are removed. There’s a solution for literally any budget.

Most Sat-Nav applications are now obtained through the Application Store used on the mobile phone. Navigon have gone so far as to remove access to their application via any other route. Application Stores are now the only choice. This move to a platform-specific sales model is a massive mistake.

Unlike the PC application market where Microsoft dominates and only two other choices remain in the form of Apple and Linux, the mobile phone market is considerably less mature. PC customers stick with what they know, it’s only recently that many Windows users have even considered a move to Apple. Linux remains for the geeks. However, mobile phones are replaced more frequently than PCs and there is more healthy competition. As a result, platforms can change very quickly. Over a six year period an individual may use 3 or 4 different handsets and platforms.

Tying anything but low value (sub £1 applications) to a specific mobile platform is madness. Consider a customer who purchases a Sat-Nav application on Windows Mobile and then 6 months later starts to use an Android mobile phone. They’ll need to purchase the Sat-Nav application again. They will perceive the Sat-Nav application vendor is charging them twice for the same application. Sat-Nav CFOs might be rubbing their hands at the thought of charging twice for the same application. However the customer has now been placed in a position where they can purchase any Sat-Nav application, and will at the point of decision have strong negative feelings towards the incumbent vendor. Perhaps they won’t bother purchasing at all and will use the free Sat-Nav application provided by their mobile phone supplier. In my view there’s a strong possibility they’ll lose the customer.

The business models of Sat-Nav vendors involve getting people in cars from A to B efficiently and easily. They solve arguments between couples when navigating on long journeys, and they generally de-stress people’s lives a little. By getting involved in the battle for mobile platform domination they’ve become pawns in a game they don’t need to play.

Far better to sell a licence key via the Application Store that can be used to activate the application once on any platform. It's a move that'll keep customers loyal - and will ultimately keep the CFO much happier.

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Opinion Articles

Last week at The Fonecast: 9th July 2012

MeeGo... and me come back again

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It was a good week for technology stories hitting the mainstream news, thanks to the apparent appearance of a Higgs boson, Sir Alan Sugar’s YouView online TV service and football goal-line technology.

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Last week at The Fonecast: 25th June 2012

Last week at The Fonecast: 25th June 2012

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Mark Bridge writes:

Microsoft started last week with news of an own-brand rival to the Apple iPad. The new Windows-based Microsoft Surface tablets will start to appear later this year, although full details of the specifications – including whether or not there’ll be cellular connectivity – remain unconfirmed.

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Adding a little extra to every mobile sale will make a big difference

Mark Bridge writes:

Is there any product that offers as much potential for additional sales as the mobile phone?

When I visit a coffee shop to buy a coffee, I’m often asked “would you like any pastries or muffins with that?”

On the one occasion that I bought a new car, I was offered the option of paying extra for different colours, for floor mats and for a fancy stereo. When you buy a DVD player or a games console, it’s pretty obvious you’ll be paying extra for entertainment.

Yet, when you consider the variety of add-ons available in the mobile industry, I’d say smartphones were in a league of their own.

Author: The Fonecast
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Article rating: 4.0

Last week at The Fonecast: 18th June 2012

What next for Nokia?

Mark Bridge writes:

Oh, how cheerful we were last Monday. Apple previewed iOS6, which will bring mobile tickets (and 200 other new features) to the iPhone and iPad this autumn. Vodafone cut the cost of using your phone in Europe with its flat-rate £3-per-day EuroTraveller deal and a few days later Three came up with its own ‘unlimited’ European data roaming.

Yet by the end of the week there were fewer smiles in the mobile industry.

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Last week at The Fonecast: 11th June 2012

Vodafone and O2 team up to battle Everything Everywhere

Mark Bridge writes:

With just three working days for many people in the UK last week, you’d be forgiven for thinking nothing much would happen. However, you’d be wrong.

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