Enter Google; Exit Microsoft, Stage Left

Enter Google; Exit Microsoft, Stage Left
http://www.gpsworld.com/lbs/enter-google-exit-microsoft-stage-left-912=
8?print=3D1

November 11, 2009
By: Kevin Dennehy
LBS Insider Newsletter, November 2009

Google Maps Navigation will change the way the location-based services in=
dustry does=20
business. How it will change the industry remains to be seen, but a major=
player offering=20
the same services for free that companies are now enjoying much profit fr=
om is very=20
disconcerting.

In other company news, MSN Direct=E2=80=99s use of unused FM radio spectr=
um was a great idea in=20
2004. It effectively used unused portions of the FM radio spectrum to del=
iver such=20
location-based services as real-time traffic, weather, and other content.=
It was a victim=20
of low-cost and evolving technology for LBS delivery. Having Microsoft in=
volved in LBS was=20
a big shot in the arm for the industry. However, it remains to be seen wh=
at the company=E2=80=99s=20
plans are to continue in the LBS space in the near future.

Despite industry observers and competitors who say otherwise, Google=E2=80=
=99s launch of its=20
Google Maps Navigation product will clearly change the players, services =
offered, and=20
financial stability of the location-based services market. The service, w=
hile being touted=20
as free, still requires initial users on the Verizon system to have requi=
site voice and=20
data plans.

With such capability as turn-by-turn navigation, voice guidance, and auto=
matic re-routing,=20
Google Maps Navigation is no entry-level app that competitors should igno=
re. Google Maps=20
Navigation initially is being offered on the Android 2.0 series devices.

Companies have seen this type of service coming from Google for a long ti=
me and predicted=20
some dire times for both personal navigation device (PND) companies and h=
andset navigation=20
vendors who offer services in a very lucrative market.

Some say that Google, which dropped Tele Atlas as its mapping company for=
North America in=20
early October (though kept the company=E2=80=99s mapping data for interna=
tional markets), will=20
make money off of location-based ads that are sold in conjunction with th=
e navigation=20
solution. The company purchased mobile advertising company, AdMob, for $7=
50 million,=20
though it is not known whether it AdMob will be joining the location-base=
d advertising=20
fray in conjunction with Google Maps Navigation =E2=80=94 but the specula=
tion is there.

Stay tuned, the fireworks and fallout from this announcement are yet to b=
e determined.

MSN Direct to Be Shut Down in 2012
Microsoft=E2=80=99s recent decision to shut down MSN Direct in early 2012=
not only means that a=20
major company=E2=80=99s location-based services offering is going away, b=
ut also signals that the=20
way LBS is delivered is rapidly evolving. MSN Direct, launched in early =
2004, was offered=20
on several navigation devices, such as Garmin=E2=80=99s Nuvi line.

MSN Direct works with unused FM radio spectrum to broadcast such data as =
real-time=20
traffic, weather, stock quotes, and local gas prices. Microsoft said that=
the demand for=20
the service had decreased significantly with the rise of Wi-Fi cellular, =
FM RDS (Radio=20
Data System), and other digital networks.

The data networks that deliver traffic and other content to mobile and in=
-car devices are=20
going through a significant evolution, said Scott Sedlik, Inrix=E2=80=99 =
vice president of=20
marketing. =E2=80=9CMSN Direct was an innovative service early on and did=
provide value-added=20
information, but ultimately is a casualty of getting stuck between other =
networks that=20
were able to deliver more scale=E2=80=A6less expensively.=E2=80=9D

Sedlik said that RDS-TMC (Traffic Message Service) continues to be the do=
minant broadcast=20
network for delivering traffic in North America and Europe. =E2=80=9CClea=
r Channel=E2=80=99s Total Traffic=20
Network has the broadcast adoption with more than 1 million subs from BMW=
, Mini, TomTom=20
and other PNDs, OEMs. Navteq=E2=80=99s RDS-TMC network has grown from a f=
ew thousand subs to=20
several hundred thousand based on their ad-supported model that is bundle=
d with Garmin=20
PNDs at retail,=E2=80=9D he said.

Sedlik said that XM/Sirius traffic data services, delivered via satellite=
, have had some=20
success in automotive. =E2=80=9CHowever, the high subscription price and=
Sirius=E2=80=99 financial=20
stability have created significant concerns at auto OEMs regarding the lo=
ng-term viability=20
of the services,=E2=80=9D he said. =E2=80=9CHD radio broadcast data servi=
ces, and [Digital Audio=20
Broadcasting] in Europe, are still in their infancy, but are expected to =
deliver broadcast=20
services next year. MSN Direct ultimately got squeezed between the vario=
us business=20
models and content of these one-way broadcast services.=E2=80=9D

While one-way broadcast services may be dominant right now, the end-game =
is two-way=20
connectivity for delivery of traffic, navigation, and other services, Sed=
lik said. =E2=80=9CThe=20
iPhone and, soon, Android-based devices are creating a revolution in the =
classical mobile=20
value chains. They are spurring intense adoption of GPS-enable smartphone=
s,=E2=80=9D he said.=20
=E2=80=9CTwo-way connectivity and the evolving value chain allow applicat=
ion developers, and OEMs,=20
to deliver incredibly rich, up-to-date, and personalized traffic, navigat=
ion, weather and=20
other content in ways that were previously not financially viable.=E2=80=9D=


Microsoft said it will provide pro-rated refunds for existing MSN Direct =
customers,=20
including those in a one-time payment program.

So while MSN Direct is shutting down, Sedlik predicts that RDS-TMC contin=
ues to grow in=20
the next few years in terms of overall subscriptions, but will ultimately=
decline over=20
time. He said that HD radio will gain some adoption, particularly in auto=
motive to steal a=20
share of the market from satellite operators. =E2=80=9CGPRS and GSM, as w=
ell as hyrbird HD/GPRS=20
solutions, will gain the majority of the market opportunity,=E2=80=9D he =
said.

Echoing Sedlik=E2=80=99s remarks about the rise of the smartphone as the =
platform of choice to=20
deliver traffic and other content, Andre Gueziec, Beat the Traffic CEO an=
d founder, said=20
that wireless data plans are going down in cost for 3G and 4G service. =E2=
=80=9CWe see the=20
smartphone as the key client for traffic information. We are moving aggre=
ssively with=20
consumer and white-label products for Blackberry and the iPhone,=E2=80=9D=
he said.