The battle for navigation is heating up

  • 17-Mar-2011 11:10 EDT

Mercedes-Benz and Hughes Telematics teamed up to let drivers blend phones, PCs, and navigation.

Navigation systems are evolving rapidly as suppliers from many fields develop techniques to provide real-time traffic information. Smart phones are expected to become the dominant navigation tool, but drivers will have a range of alternatives.

The changes are part of a dramatic shift in infotainment as offerings from consumer electronics and service providers move control of the options away from the automakers. That’s creating a highly competitive environment as everyone attempts to come up with a viable solution.

“Car OEMs, automotive Tier 1s, telematics service providers, and independent system and software developers are rushing to launch smartphone applications,” ABI Research Practice Director Dominique Bonte noted. The number of global users of telematics smartphone applications will increase from 3.2 million this year to 129 million in 2016.

Navigation is already one of the dominant auto-related apps. It was the most-used phone app in a Frost & Sullivan survey in Europe, with 66% of survey respondents using navigation daily or weekly. The report predicted that navigation will eventually become a function of the smartphone, not the car.

While programs on smart phones may eventually dominate the market, providers are offering a range of alternatives. Mercedes-Benz USA is preparing to launch a new mbrace service developed by its partner, Hughes Telematics Inc. It makes it simpler to send destinations to the in-vehicle navigation system. Drivers can use PCs or mobile phones to directly enter an address, send contacts from their contact book, or search and send points of interest, among other options.

Radio broadcasters are also entering the field, leveraging their existing data-gathering infrastructure. For example, Clear Channel Radio’s Total Traffic Network recently partnered with Global Alert Network.

Their service broadcasts audio reports to a phone, providing alerts that drivers can get while operating in a hands-free mode. This approach adds up-to-date information on delays, accidents, and construction even when drivers aren’t using navigation or when they have a service that doesn’t provide automatic updates.

Demand for real-time updates is increasing rapidly, according to most studies. That interest may grow more rapidly if employment rises and more people commute regularly. Traffic congestion increased nationwide for 11 consecutive months last year, and travel times increased an average of 10%, according to Inrix. The company noted that these increases came even though employment rose only modestly in 2010.

While the market appears set for solid growth, there are still some question marks. Fragmentation between many different providers comes as hardware costs plummet and many apps come for free, making it tricky to maintain a revenue stream. At the same time, driver distraction issues remain a key concern, particularly when phone and software providers new to the automotive industry get involved.

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