Yesterday TomTom launched a new subscription map service, boringly dubbed “Map Update Service”, to provide customers with quarterly map updates. A one country map subsciption for entry-level PND’s such as the TomTom ONE and TomTom ONE XL will cost €39.80 in Europe, while TomTom’s higher-end GO models will be priced higher thanks to more advanced features such as IQ Routes (historical speed data).
It’s been interesting to watch PND makers invent new ways to monetize over the past year. TomTom’s new update service is very similar to Navigon’s FreshMaps map updates. The only difference being Navigon uses NAVTEQ data, while TomTom uses in-house TeleAtlas data. Garmin, while missing from the paid map subscription landscape so far, recently cut subscription fees for TMC real-time traffic data on its nuvi 7×5 series models in exchange for ad-support.
Ludovic Privat from GPSBusiness News points out that this could be a defining trend in the future PND market. He says that up until now, we’ve tended to buy a new PND when its come time for updated maps or features. But with thinning profit margins for manufacturers, the hardware is becoming the entry point for making money in the software field. Meaning for a company like TomTom, it’s more lucrative for you or me to hang on to that $150 TomTom ONE for a few years, paying TomTom annual subscription fees, rather than buy a new TomTom PND. Sure a PND costs more for us, but TomTom also has to pay more to manufacture it. Now that they own TeleAtlas, the map data is readily available, and the accompanying map update software doesn’t have to be rewritten millions of times for each device. Ultimately this is where company’s like TomTom, Navigon, and Garmin will make their money.
Welcome to the new PND business.
via gpsbusinessnews
