Android turn-by-turn GPS tanks GPS stocks

Robert Hallock (Thrax) Stocks for Garmin and TomTom fall sharply on news that Google's Android 2.0 OS will offer free turn-by-turn GPS.

October 29, 2009 11:21 AM ET in News, , , , , , , , ,

Google’s announcement that the upcoming Android 2.0 update will offer free turn-by-turn GPS has sent stocks for major GPS manufacturers reeling.

The web was abuzz yesterday with news that Android 2.0, set to debut with the hotly anticipated Motorola Droid, will offer free turn-by-turn GPS. The feature is called Google Maps Navigation, and it will provide all the trimmings of a dedicated GPS unit, including: Free lifetime map updates, text and speech direction input, traffic reports and audible directions. A persistent cellular connection also gives Navigation-equipped mobiles access to Google’s Street View and PC-free updates–features not offered by traditional GPS units.

While future Droid owners celebrate their victory, the announcement has panicked investors for the market’s biggest GPS makers, TomTom and Garmin. Shares of Garmin (GRMN) have fallen nearly 17% since Wednesday to $31 USD, while sympathetic performance in Dutch rival TomTom (TOM2.AS) has submarined their stock by 29% to trade at €7,40.

Garmin and TomTom shares fall in response to Google's nav market entry.

Garmin and TomTom shares fall in response to Google's nav market entry.

Analysts say that the losses are exacerbated by fears that the navigation market is in terminal decline. Investors are quick to point out that the Garmin/TomTom GPS duopoly has been eroded by market entries from Research In Motion (RIM.TO), Palm (PALM.O), Nokia (NOK1V.HE) and even Apple (AAPL.O).

“Google’s announcement today introduces new challenges for both Garmin and TomTom and makes the threat from smartphones more real than it ever was before,” told Reuters on Wednesday.

And the Motorola Droid is only the beginning. The Android 2.0 update, codenamed Éclair, is compatible with virtually every model in the rapidly growing array of Android-powered phones. Though the 2.0 update is subject to carrier approval, many believe that popular devices like the HTC Magic, HTC Hero and Motorola Cliq will soon receive the update as well.

The Motorola Droid with Google Maps Navigation will debut on November 6 exclusively on Verizon Wireless in the United States.

6 Comments:

  1. AlexDeGruven
    29 Oct '09, 3:42 pm

    Nice. I'm for sure picking up a Hero or Moment in December, and I can't wait to get my hands on the mod community. The WinMo community has managed to make using my HTC Touch pretty bearable, even when considering WinMo's multiple failings, so I can only imagine what the Android community is doing with an already well-capable OS.

  2. Gnome Queen
    29 Oct '09, 3:56 pm

    I can't wait to get my droid! This Google GPS looks awesome.

  3. ardichoke
    29 Oct '09, 4:18 pm

    Not only is this putting the hurt on GPS makers, but Google is apparently not going to release it on the iPhone (at least not very soon) thanks to Apple being obstinate about allowing new Google Apps into the App Store.

    http://www.washingtonpost.com/wp-dyn...102804124.html

  4. Snarkasm
    29 Oct '09, 4:26 pm

    Wait, you're going to use an opinion piece as fact? Come on, now, ardi.

  5. ardichoke
    29 Oct '09, 4:32 pm

    Eh... my bad, I kinda skimmed the article while I was doing a half dozen other things. Taking a closer look at it, I see that is a bit more opiniony than I originally thought. Nevertheless, the fact remains that Google navigation is coming out for Android before the iPhone which is a bit of a first since so far Google has tended to release things either at the same time or on iPhone first.

  6. chrisWhite
    31 Oct '09, 4:23 pm

    I don't know, I'm not sure Apple actually wants turn-by-turn via Google on the iPhone. They've long been restrictive of that, turn-by-turn was only allowed in the App Store with iPhone OS 3.0 released earlier this year and turn-by-turn apps can't use the Google Maps API.

    Considering that MobileNavigator North America ($89.99), CoPilot Live North America ($34.99), TomTom U.S. & Canada ($99.99), MotionX GPS Drive ( $2.99 + $24 yearly) are all currently in the top 50 grossing apps on the App Store having Google release it for free, or even cheap, would kill those apps and their profits (which Apple gets a cut from).

    Regardless, this is sexy, and I am jealous.

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