Dash stops hardware, lays off 65% workforce

the Silicon Valley company shift to B2B, probably too late

Dash stops hardware, lays off 65% workforce
Silicon Valley-based Dash Navigation said yesterday it is “shifting its focus from delivering connected navigation devices directly to consumers to licensing its application and service to run on platforms such as onboard navigation systems, smartphones, PDAs, mobile internet devices, and other consumer electronics.” As a result the company laid off over 50 people keeping a staff of 30, mainly engineers.

The vendor of the 2-ways connected personal navigation device, Dash Express, had difficulties to enter the brick and mortar retail stores after delaying its launch by 18 months. When initially announced in September 2006 the product was supposed to “be available from www.dash.net and select retailers in California in early 2007, and will be available nationally next summer”; it finally was available from Amazon in April 2008 and never made it to a retail stores U.S. wide. As a result of these delays the price was reduced from a planned $599 to $399 at launch, then to $299 a few months ago.

There are many factors that explain why Dash failed to establish itself has a brand on the market. But the biggest reason is probably the failure of its executive team to understand the PND market dynamics.

First, a high end, one product strategy was very risky because the rest of the market is making volume – hence economies of scale - on low end products and decent margin on high end, one being closely tied to the other. Second, the U.S. market was not mature yet for such a device with a significant monthly fee ($10 to $12) from an unkown company. Third, Dash watered down its key differentiator - accurate traffic information based on its community of drivers - with web 2.0 geeky stuff which are cool to show off in Silicon Valley tech conferences, but do not sell today and probably scared buyers from CE retail chains.

Too late to go B2B?
Now Dash wants to pursue its activities in licensing its software platforms to car manufacturers, Smartphones, Internet devices, etc. This is a good idea but it should have been implemented much sooner. Already 14 months ago, Dash management was pretty much understanding that its future was not in the hardware business. At that time GPS Business News spoke with Robert Acker, vice president of marketing who said: “Moving forward we will likely continue to do a standalone product by ourselves, but I think our bigger vision is around partnering with other companies and developing the infrastructure”. now dash will have to implement its bigger vision with 30 people instead of 85. In the meantime the company burned a good chunk of the $71 million it raised and missed some good opportunities: for example, BestBuy, which never put the Dash Express on its shelves, commissioned deCarta as a white label provider for its home-branded (Insignia brand) connected navigation device.

Moving forward Dash will have to be both cautious and fast. The automotive and mobile navigation software industries have not waited for Dash to innovate in connected services, including crowdsourcing traffic information. TomTom Live services will be soon in-dash (starting with Renault) and on phones and many other players are busy working on these opportunities.

Wednesday, November 5th 2008

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