Already today, almost everywhere in Europe, one can find good Personal Navigation Devices between €99 and €149. The latest example is the Takara GP26 just launched in France at €99 with a 3.5 inches touch screen, French Navteq map data and Destinator software.
Sony is definitely willing to make very fat margin on this accessory. If we consider the add-on GPS, the software, the map and the car kit, its bill of material is probably under €30. With a pretty similar bill of material, Garmin has just announced a GPS solution for laptops that will retail at $99 with full U.S. maps.
With an aggressive price point at €79 or €89 Sony would have offered a good value proposition to its millions of European PSP customers and could sell good volumes while still maintaining correct margins. Sony could also leverage the WiFi connection of its device to add to the bill some high margin premium contents and services (speed cameras, gas prices, rich POIs, nearest PSP game retailers, etc); as PND manufacturers are starting to do today.
Mr. Sony please don’t believe your customers are blind people; they are savvy kids or grown up persons. If they want navigation they will buy it at the best price, not yours.