GPS Business News interviewed with Rich Rudow, general manager of Trimble Outdoors, the consumer division of the well known B2B GPS company. Rich Rudow will speak at the Navigation & Location conference in San Jose, California on December 1-2 and he was keen to give us a preview of his speech about “Mobile Navigation Application Price and Channel Strategies”.

Location-based services from Trimble Outdoor have been offered by most of the tier one wireless operators in the United States and early online application stores such as Handmark and Handango. More recently Trimble has been offering these solutions through iTunes and RIM’s App World stores. In this interview Rich Rudow gave us an insider view about the differences between these various channels in terms of customers, volume, price and marketing.

GPS Business News: to get started, can you give us some background about your sales channel?
Rich Rudow: Sure, as your readers probably know, Trimble Outdoors offers a range of location-based services for outdoor enthusiasts who are into activities such as hiking, backpacking, road and mountain biking, running and fishing/boating. Historically we have set up partnerships with US wireless operators as well as application stores such as Handmark, Handango and a few others. More recently we have experienced a changing environment with the advent of the Apple App Store which is essentially disintermediating the wireless operators. This was quickly followed by others such as Blackberry App World, Ovi Store, as well as Samsung and Sony Ericsson initiatives in that area and, of course, the Android Market.

We have quickly launched on many of these channels and what we can see today is that it is still a very immature market. What I have seen is that in the LBS space only a few companies have figured out ways to make money on the app stores, even on iTunes.

GPS BN: How big is your App store business today?
RR: Today we are still making most of our business with the wireless operators even if our apps are doing well on Blackberry App World and iTunes. To give you an example our business with Apple is even smaller than what we do with T-Mobile [in the US].

GPS BN: You mentioned the lack of maturity of these new channels, how do you see this evolving?
RR: I think it is a bit of a land grab now and very few companies have established a sustainable business model on these application stores yet.

If you look at our application AllSportGPS on iTunes, to keep it competitive we reduced the price from $9.99 to $2.99, but what we sell is much more than a simple mobile application because you can do many additional things with our website to calculate your sport fitness improvements over time. For example calculating the calories burnt or the distance you ran last month against the previous month, upload and download GPS tracks, share your workouts with friends, etc. This is difficult to monetize this whole experience.

So I believe this app store business is slowly evolving into a freemium model: a free or low cost basic application and then more complex features for which customers pay. Companies such as Motion X and Runkeeper have been doing a good job with that.

The other thing starting to make traction is in-app purchase. We think we are well positioned at that level moving forward because we have set several partnerships with magazines and content providers that could allow us to sell additional content such as trails for backpackers, bicycle rides, or running tracks for which consumers are likely to pay.

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