Dash acquisition and the standalone navigation market

This week it was announced that RIM bought Dash Navigation. I’ve written before about Dash. I’ve long been excited about the service, but Dash suffered from three big problems:

  • Bulky and expensive hardware — The device was nearly three times as big as most of its rivals. It’s weight necessitated an industrial-strength mount. The combination wasn’t something you could easily throw in your bag when traveling. At $399, the price was at the high end of the market.
  • High monthly service cost – Dash had a built in cellular modem, which added a steep monthly subscription fee. Many of the features that you might expect to see in such a beautifully engineered service — weather maps, videos, pictures of businesses — couldn’t be provided because of the high rates charged by wireless carriers.
  • Lack of distribution — Dash Express was available direct form the company and through Amazon, but never made it into the big box retailers where a lot of GPS units are purchased.

The RIM acquisition solves the first two problems. If RIM adapts Dash for use on Blackberrys, you won’t have to have a separate device and the service can ride on top of your existing data plan. Dash will be in a position to offer a better product for a lower price.

Distribution may still be a challenge; it’ll be interesting to see if carriers will allow RIM to ship a navigation offering that competes with their own. Two years ago I would’ve said there’s no chance; now I’m more hopeful.

Dash/RIM will face stiff competition. I expect that in the next two months we’ll see TeleNav, TomTom and others come out with turn-by-turn navigation applications for iPhone. (See my earlier post on what an iPhone-based navigation service could do.)

Between iPhone and Blackberry, this could spell the end of the standalone PND. The 2-way connectivity offers the ability to deliver a wide range of services that unconnected PNDs can’t offer: up-to-date business search, integration with Web apps like Zillow home prices and radio station finders, buddy finders, realtime traffic, gas prices, pictures of businesses, etc. Integration with the phone’s address book provides additional opportunities.

TomTom and Mitac have been struggling with rapidly eroding margins. Navigon has left the U.S. market entirely. If iPhone and Blackberry-based navigation take off, the standalone PND market may just be price sensitive consumers buying low end devices at Wal-Mart for $60.

Success of cell phones in the PND market will depend, in part, on the accessory market. We need to see car mounts that will let you charge your phone, serve as a speakerphone and let you transmit music from your phone to your car.

Disclosure: I worked on the distribution agreement between Tellme and Dash Navigation.

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