Garmin Set to Launch Map Subscriptions
Garmin who owns a giant share of the US market, is starting to plan for ways to capture more revenue from that installed base; this time with a Map Subscription. Following on the heels of Navigon's FreshMaps and TomTom's Update Service, Garmin is bringing updated maps to subscribers on a regular basis. I was speculating about a Garmin release in the TomTom announcement thinking that with Navigon also using NAVTEQ maps said to me that it wasn't a map supplier barrier that needed to be broken down; it was an internal Garmin decision based on technical delivery and market strategy. I have talked a lot lately about getting different revenue streams from the GPS after its sale, and map updates have been a good one. The subscription model though brings a large cash flow injection upfront that has marginal costs later on down the line. In these troubled times, it's great to capitalize on the cash flow now. This may also lead to a better marketing position at point of sale, and result in more satisfied users who stick with the brand due to better perceived quality of the product.
The Cost is 119 Euros, which directly translated to the US is pretty high, but my hunch is that the US price will be more competitive with Navigon's $79 price point. The updates are quarterly for the lifetime of your device.
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Posted by Scott Martin at October 9, 2008 6:45 AM
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