Satnavs Heading for a Dead-end

Last week, Halfords, the UK’s largest motoring accessory retailer, released its half-year trading statement. And it made pretty grim reading. Bicycle sales down in a market where demand is growing, and satnav sales down by a remarkable 16 per cent year-on-year.

As the UK’s largest retailer of satnav devices, Halfords is very much a barometer of demand, and this dramatic downturn in sales is further evidence of the increasing popularity of smartphone navigation.

Satnav on a phone has been a feature of high-end phones for several years now. Originally an early adopter choice, available on devices such as the Windows Mobile-based O2 XDA Orbit and Nokia N series handsets, it is now becoming one of the most popular functions of a smartphone.

With their superb colour touch screens, powerful processors and mammoth storage capacity, the latest phones are in many ways better designed for satnav than dedicated devices. They offer higher resolution displays, are more portable for removal from the car at the end of a trip, or for use on foot, and of course are ubiquitously connected – ideal for receiving useful real-time information, such as traffic incident updates.

Smartphone satnav apps are much less expensive than dedicated devices too. A full-featured app like CoPilot Live can be had for about £20, including advanced features you’d expect from the most expensive navigation devices, such as lane assistance arrows and safety camera alerts. Compared with a dedicated device typically costing in excess of £100, they offer compelling value, particularly in the current tough economic climate.

Of course, even £20 seems expensive alongside free apps such as Google Maps Navigation or Nokia’s Ovi maps. These apps also offer turn-by-turn voice guidance, typically with maps downloaded dynamically, making satnav more accessible than ever. However, those customers looking for a comparable experience to a dedicated device, with maps stored on the phone currently still need to go for a premium app. A glance at the top grossing iPhone apps in pretty much any market shows how popular full-featured satnav is proving to be. It’s one of the only categories of app that can command a double digit sales price for a consistent period of time.

As smartphone sales continue to soar, the erosion of the dedicated navigation device market seems certain to continue – and will most likely accelerate. Increasingly, drivers are now equipped with GPS-enabled devices that are entirely capable of replacing a dedicated navigation device, both less expensive and more convenient. People are more comfortable with the idea that their phone is capable of ‘non-phone’ tasks, and the dedicated device seems destined to become the niche product, swapping roles with apps as smartphone navigation becomes mass market.

David Quin is marketing director at ALK Technologies