Today I had the chance to speak with navigation software provider TomTom about product strategies in a quickly evolving mobile technology environment.
The company was an early mover in the mobile navigation space including some of the first in-car navigation systems near the time of its launch in 1991. It also invented the personal navigation device (PND) in 2004, according to Bjorn Cronquist, director of business development.
But an evolving and fragmented mobile device market has forced the company to innovate beyond PNDs in order to optimize its user penetration. PND sales are flat, says Cronquist, but in-car systems and smartphone apps are growing markets.
For in-car systems, the company projects that more than 40 percent of the half-billion cars in North America and Europe will have built-in navigation systems by 2012. TomTom’s share of the in-dash market in Europe is currently 10 percent.
As for smartphones, penetration and device evolution are likewise cutting into standalone PND sales. This is similar to the story we heard from TeleNav, which had the foresight to diversify into software and mobile app development. TomTom currently has a high-end iPhone app.
In addition to devices, TomTom also sees an opportunity to diversify revenue sources. This comes at a time when mobile local search itself is a growing area. Along these lines it will move beyond just subscription-based services to include ad-supported local search.
This will involve working with local sales channels such as YP publishers in order to bring their listings and ads into the navigation experience. It will be a shift in use case from navigation-only, to comprehensive trip planning that integrates business searches in and around that routing.
As we discussed with TeleNav, this can have advantages and appeal for advertisers that wish to see concrete results about users that were led directly to their doorsteps. Reporting on not only clicks and impressions, but also directions generated, is the basis for this opportunity.
The company has already formed a deal with Truvo in some of the publisher’s European markets. With this content, it will supply business search capabilities as part of its core navigation interfaces. In this case, sponsored listings will reside atop organic local search results.
TomTom will continue down this path, including lots of currently unannounced deals with local search and YP players. Also on the road map (no pun) are a few new products to more effectively get in front of users on different devices. Those I can’t talk about just yet but stay tuned.