According to him “Technical difficulties, carrier agreements and the general economic climate have been the main reasons for the delays,” says ABI Research director Dominique Bonte. “For many PND vendors, cellular connectivity is a completely new project representing a huge challenge in terms of implementation, the development of new services, and the negotiation of agreements with carriers. Moreover, the worsening economic climate, the slowdown of the PND market growth, and the profitability issues faced by most vendors have resulted in connected PNDs ranking lower on all parties’ priority lists.”
Our take on the problem faced by PND vendors with regards to services is slightly different. First, integrating connectivity into a CE device is not rocket science anymore and many providers can pretty much offer an out of the box solution. For example Mio has been working with Intrinsyc to deliver the connectivity stake of its Mio Moov 380. Second, PND vendors do not need signing deals with carriers: many M2M vendors are out there with SIM ready solutions such as Jasper Wireless which powers the Dash Express.
Obviously, in one hand the economic climate is not good, but in the other hand it does not hinder the growth of the - non-connected – PND category, with a 100% volume increase in the US in the second quarter.
The problem faced by “connected PNDs” is rather due to two other factors: first, a lack of consumer research to find the real services wanted by consumers. As an example, a recent private research we read demonstrates movie listing is very far down the priority list of PND customers, but it is still one of the preeminent channels offered by MSN Direct to Garmin and other PNDs manufacturers.
As an example, for low volume users, SMS is probably a more cost efficient method to deliver local search results, gas price, etc. This can be priced as a low cost subscription or as pay per act model. Additionally, many customers are using their PNDs only one or two times a week during the year but almost every day during their holidays. They would not mind to pay a premium to access connected services during their vacation.