The Death of $2k Navigation Systems

Car companies have focused on navigation systems as a core technology offering for at least a decade now, and remarkably the price of these systems has stayed pretty constant, about $2,000. Few manufacturers offer the nav system standalone, you typically get it as part of a “technology package” that includes things like integrated bluetooth, parking sensors or cameras, and satellite communication to a concierge service (that few of us have ever used). On balance, it still comes out that the nav system is about $2k of value, according to the manufacturers.

I was thinking recently that for my next vehicle purchase I will skip the nav system package and the reason is my iPhone. While the plain ‘ol iPhone is plenty good, with real time traffic (touted as a new feature for in-vehicle systems), the aftermarket apps for the iPhone, from TomTom and Navigon, are even better. Why use the nav system in my car when the iPhone works just as well and has a better user experience (especially with “send to phone” in Google Maps)?

Users have been begging for it, and now Navigon has updated the Mobile Navigator [iTunes link] app to read street names to you as you drive.

[From Holy Grail of turn-by-turn arrives: Navigon updates GPS app with text to speech]

This represents an enormous strategic error on the part of auto manufacturers. Instead of complimenting in-vehicle nav systems with a web and mobile offering, and working to drive down the price points on these systems, they milked them for every cent of margin they could get and ignored the advances that were well under way in the mobile app world, which created not only a huge opening for a competitive technology but instilled in their customers, like me, a good degree of schadenfreude, hoping they get hoisted up by their own petards for treating me as they have.

For all the talk of telematics over the last couple of decades, car manufacturers continue to treat in vehicle technology as a standalone system rather than a networked component part of a bigger system offering. Occasionally we see advances like the Send to Car feature in Google Maps and Yahoo Maps that works with Mercedes and BMW vehicles (2008 models and later only), but even here we find something that car manufacturers fail to embrace – upgrades.

Satellite communication systems are fairly standard in most cars but aside from voice communications (to their call center only) these systems don’t do much. Why haven’t car makers embraced using these networks to upgrade existing systems in older cars with new features? The nav system in my 2007 Mercedes is functionally the same as what got offered in 2008, minus the Send to Car feature on the web, and when I called the MBZ Telematics service to ask them about upgrading my 2007, they treated me like I was from Mars. Surely this is not something that they have not ever thought of?

This year I declined to renew the $250 a year Mercedes Telematics annual service and in shopping for a new car for my wife I have been asking – actually telling – dealerships that if they want to give me a car with a nav system it was going to come out of their pocket and not mine. I don’t need it, don’t want it, and certainly won’t pay for something I am not using and have no confidence that the manufacturer will enhance if I actually do get it.