Strategy Analytics sees major firms challenging in-vehicle navigation suppliers

Apple, Google, and Microsoft battling for market share

Major technology companies, such as Apple, Google, and Microsoft, are beginning to battle for share of the in-vehicle navigation market, according to the Strategy Analytics report, “Automotive and Portable Navigation:  Market Drivers and Forecasts 2011 -2019.”  This may spell trouble for traditional tier one navigation manufacturers like Continental, Denso, Harman, as well as for Garmin and TomTom.

“The recent Apple announcement regarding its automotive OEM partnerships and the expansion of Apple’s mapping efforts could significantly change the in-vehicle navigation market,” said John Canali, Senior Analyst at Strategy Analytics.  “Previously major technology companies largely wrote off automotive markets. However, with a growing emphasis on creating a unified experience across all screens (PC, handset, TV, and in-dash display), the automotive screen is becoming an essential additional battle to win.”

Richard Robinson, Director of Automotive and Multimedia Communications at Strategy Analytics, added, “Competing against these new players will be difficult for incumbent suppliers of navigation systems because the new players are so well capitalized and can devote far more to research and development.   Incumbent players need to reevaluate their role to demonstrate their worth in the supply chain, while OEMs must weigh what strategic alliances will provide the most benefit to consumers.”

“Microsoft was an early entrant in the navigation market with off-board speech recognition (TellMe) for Ford’s Sync system. It is also working with Fiat and Kia, so it has a good base to work from, and has tremendous name recognition,” said Canali. “Microsoft’s TellMe is similar to Apple’s Siri, but Microsoft needs to keep working to improve TellMe and, overall, needs to be more innovative.”

Apple’s main competition

Canali said Apple sees Google’s Android, not Microsoft, as its main competition in the long term. “Apple’s goal is to be the name consumers think of when they think of screens. The popularity of the iPhone gives consumers reasons to buy iPads, and iPads give consumers reasons to buy Macs,” he said.  “Google wants to leverage its browser and its search capabilities as much as possible, and it benefits from licensing Android technology.”

“Cool technology” being stripped from the head unit

According to Canali, “cool technology” is being stripped from the head unit and provided by Apple or Google. As a result, tier one suppliers “could end up becoming hardware vendors that can be replaced by lower-cost manufacturers.

“Firms like DENSO, Harman and Continental have all been discussing cloud platforms, but I’m not sure they have the know-how,” Canali said. “It is possibly beyond their core competence. OEMs have to be very careful not to provide systems that consumers consider sub-par, whether due to reliability, or inability to meet consumers’ preferences.”

Other posts you may be interested in reading:

1. Strategy Analytics sees Bluetooth strategy key to infotainment success – Bluetooth in 70% of Vehicles by 2016
2. Strategy Analytics sees Bosch ahead in Stop-Start systems
3. Strategy Analytics sees growth for multipurpose displays