Google Steps Into Another Market: GPS for Phones

MOUNTAIN VIEW, Calif. — GPS navigation devices were the latest must-have tech toys just two years ago, and shares of device makers like Garmin and TomTom were soaring.

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A screenshot shows Google’s new mapping navigation.

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That didn’t last long. In a turnabout that has been remarkably swift even for the fast-moving technology business, those companies have suffered as competition has pulled down prices — and as more people have turned to their cellphones for directions.

In the latest blow to the business, Google announced a free navigation service for mobile phones on Wednesday that will offer turn-by-turn directions, live traffic updates and the ability to recognize voice commands. The service will initially be available on only one phone, the new Motorola Droid, but will be expanded to more phones soon.

In a briefing on Tuesday in advance of its announcement, Google said that the service might be supported by advertisements in the future. That would make driving directions the latest form of information to shift from being a paid service to one that is ad-supported.

“This is consistent with a certain pattern of Google, where they are able to build volume and usage of a product and then subsidize it with advertising,” said Greg Sterling, principal of Sterling Market Intelligent, a research firm. The losers, he said, were companies like TomTom and Garmin, along with the cellphone carriers, which offer navigation services by subscription.

Eric E. Schmidt, Google’s chief executive, said that he didn’t view the new service as hurting an industry. Instead, he said, it is a boon to consumers, made possible by the increasing power of smartphones and the growing ubiquity of Internet access.

“Obviously we like the price of free, because consumers like that as well,” he said.

But analysts say that if successful, Google’s service could chip away at sales of stand-alone GPS devices and the subscription services offered by cellphone carriers.

Sales growth for those devices is already slowing. In 2007, global shipments of stand-alone navigation devices grew a hefty 131 percent from the year before, according to data from the research firm In-Stat. But the firm predicts that shipments will grow just 19 percent this year from 2008, and a price war has hurt the industry’s profits.

“With a free alternative that is just as good, I don’t see much positive growth for the likes of TomTom, Navigon or Garmin,” said Dominique Bonte, director of navigation research at ABI Research. “If it’s free and a good service, why would you pay for something you can get for free?”

Google’s announcement also reflects a broader shift toward consolidation in the gadget world.

The smartphone is already the Swiss Army knife of the digital age, able to transform into a camera, music player or game machine at the swipe of a finger. Now it is increasingly a navigation device too.

Many people still prefer dedicated GPS devices, which tend to display maps faster since the data is typically stored in the device rather than downloaded over a wireless network. But the list of smartphone shortcomings is shrinking. Smartphone users can download applications that offer spoken directions and live traffic updates. And at $100 to $300 apiece, smartphones are competitively priced with GPS units, which average about $177, according to the research firm NPD Group.

By 2013, phone-based navigation systems, which are already more popular among younger smartphone owners, will dominate the market, according to a recent report from Forrester.

The makers of navigation devices have not ignored the spread of smartphones. But Google’s move could make it harder for them to adapt.

TomTom, based in Amsterdam, introduced a $100 navigation application for the iPhone in August. The company said the program had been downloaded close to 80,000 times. Garmin recently released the Nuvifone, a hybrid of a navigational device and a cellphone that has generally received poor reviews.

“Turn-by-turn navigation on a handset is what we’re been doing with the Nuvifone,” said Ted Gartner, a spokesman for Garmin, which declined to release sales figures for the phone. “Google’s announcement reaffirms that consumers want their smartphones to double as a navigation device.”

Julien Blin, principal analyst at JBB Industry, called Garmin’s phone a “desperate move,” adding: “The Nuvifone is around $300, and you can get an iPhone for a comparable amount that can now do the same thing.”

Shares of both TomTom and Garmin plummeted Wednesday after Google’s announcement. Garmin’s shares fell 16 percent to $31.45 on Nasdaq, while TomTom’s shares closed around 21 percent lower on the Amsterdam Stock Exchange.

Google’s navigation service, which for now works only in the United States, is part of a new version of Google Maps for Mobile, software that will work on the growing number of phones that run Google’s Android operating system. Google executives said they eventually hoped to offer the service on Apple’s iPhone and other mobile devices. But they said this would be up to those device makers. Apple and Google have clashed over Apple’s reluctance to approve an application that works with the Google Voice calling service.

As mobile services that involve location have become increasingly important, the underlying mapping data has become a valuable strategic asset. Google recently began creating its own digital maps in the United States, ending a contract with the map data provider TeleAtlas, which is owned by TomTom.

A year earlier, Google had chosen TeleAtlas to replace Navteq, a map data provider that Nokia acquired for $8.1 billion in 2007. Google and Nokia are rivals in mobile phone operating systems.

Google Voice Silenced by Apple on iPhone

Updated: Apple shuts the door on all Google Voice applications, including third-party applications that support search engine giant Google’s VOIP and telephony product, which is rolling out to more users. Google Voice duplicates some features in the iPhone, but analysts believe Apple’s chilliness also stems from its relationship with AT&T. Carriers dislike Google Voice because of the free SMS and cheap international calls it provides.

In a sign that Apple will not always play nice with Google, Apple has banned the Google Voice application, as well as third-party Google Voice applications, from its iPhone App Store, ostensibly because Google Voice features compete with those in the iPhone.

Reached by phone July 18, Apple spokesperson Jennifer Bowcock declined to comment, but a Google spokesperson confirmed the ban of Google Voice in a statement to eWEEK July 27:

Apple did not approve the Google Voice application we submitted six weeks ago to the Apple App Store. We will continue to work to bring our services to iPhone users—for example, by taking advantage of advances in mobile browsers.

The move was first reported by TechCrunch and there is additional coverage on TechMeme.

Earlier in the day on July 27, iPhone application developer Sean Kovacs said his popular application GV Mobile, which lets users make calls and send SMS (Short Message Service) messages from a Google Voice number to any other number in a contact list, was also removed from the App Store.

Kovacs wrote in his blog: “Richard Chipman from Apple just called—he told me they’re removing GV Mobile from the App Store due to it duplicating features that the iPhone comes with (Dialer, SMS, etc). He didn’t actually specify which features, although I assume the whole app in general.”

VoiceCentral, which does the same thing GV Mobile does, was also banned from the App Store, but not until reporters asked Google about Google Voice did anyone learn that Google’s application had been give the cold shoulder as well.

While Apple is maintaining its silence on the subject, TechCrunch speculates that Apple’s treatment of Google Voice applications comes courtesy of sole iPhone carrier AT&T. Update: Daring Fireball’s John Gruber confirmed this through a source.

Phone companies are leery of Google Voice, which does an end run around their services by providing free SMS and cheap international calling services.

Enderle Group analyst Rob Enderle acknowledged that Apple and AT&T would indeed have reason to shunt Google Voice to the side. Enderle told eWEEK:

With Google Voice, the competitive issue would exist with both Apple and AT&T because it reverses the strategy Apple has with iTunes and Safari on the PC (use them to pull customers to Apple products from Windows) to apply to the new Android phone platform and, since it is VOIP [voice over IP], it potentially cuts AT&T’s revenue stream as well.

More broadly, Enderle noted that programmers are having a hard time figuring out what applications will or won’t be accepted in the App Store, adding that Apple is showing a trend toward blocking or crippling applications that appear to be competing.

Enderle pointed to streaming music application Slacker, which is crippled on the iPhone and can’t be used on an airplane. However, Slacker works on a BlackBerry during flight just fine.

“Out here [in Silicon Valley], the metaphor used to describe Apple’s app approval process is ‘Russian Roulette,’” Enderle quipped.

The combination of a cryptic process and this anticompetitive behavior has some developers turning to write programs for Research In Motion’s BlackBerry operating system, Google’s Android OS and Palm’s Palm WebOS, Enderle said.

The banning of Google Voice and associated applications isn’t the first time Google has had to kowtow to Apple. Google introduced Google Latitude for the iPhone July 23, but must now rewrite it to be a Web application.

“After we developed a Latitude application for the iPhone, Apple requested we release Latitude as a Web application in order to avoid confusion with Maps on the iPhone, which uses Google to serve maps tiles,” Google Mobile Team Product Manager Mat Balez wrote in a blog post.

Apple’s chilliness toward Google’s Web services is interesting given Google’s supposed closeness with Apple. Analysts have long seen Google and Apple as linked arm and arm against enemy Microsoft, and Google CEO Eric Schmidt commands a seat on Apple’s board.

The question is how long Apple and Google will remain close as they continue along their competitive path regarding Web services for mobile phones.

HTC TOUCH Windows mobile – Ruling the Heart of Millions

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One such mobile phone by HTC is the HTC Touch phone ruling the hearts of millions with its gorgeous looks and numerous features. You can experience the new sensation by just taking it in your hands. With this handset, the internet explorer is in your hands 24×7. As it is equipped with Windows Mobile 6 Professional surfing the net, sending and receiving mails from Hotmail and Yahoo becomes easier and handy. Now chatting on the messenger, sending photos through Windows Live gets quick and off course it can be used anywhere and without any hassles.

This HTC Touch phone has something magical; you will always remember the first touch. The touch screen is so easy to use that even a child can use it and it provides with simple user interface. With the Touch FLO screen technology, HTC Touch boasts of quick dialing, web browsing and entertainment. This HTC Touch Mobile gives a new definition to mobile phones, as it opens a new world for its users, providing him with media, communication and social interaction.

The most remarkable feature of the HTC Touch phone is the memory and the various audio formats it supports. The special piece has a total internal memory of 128 MB, which can be extended up till 1GB, making it possible for you to store songs, movies, videos, etc. The audio formats supported by the Window Media Player are: AAC, AAC+, eAAC+, MP3, WMA, WAV, QCELP, MPEG4, AMR-VB, AMR-WBA and MIDI, making it possible for you to listen any song without worrying about the song format. The display screen of this HTC Touch Phone is big enough to give you a crystal clear views of whatever you see, be it the functions or videos. This HTC Touch phone has a 2.0MP CMOS color camera, which gives new dimensions to photography and cherishing special people and special moments.

This HTC mobile Phone model has specialized in making your life easy and simple and with the handset in your hand makes you stylish also. This mobile phone seamlessly brings your professional and personal near giving you relaxation and new edges to life.

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