Page last updated at 08:11 GMT, Friday, 1 January 2010

Will smartphones see off sat-nav?

sat-nav in car
7.5 million sat-navs in the UK since 2004.

Smartphones with GPS and talking map applications are increasingly competing with sat-nav devices, experts say.

In response Garmin and TomTom, two major players in the sat-nav industry, have joined the smartphone market.

Both companies have launched their own smartphone applications for various handsets.

Garmin has also decided to enter the handset market directly, with the launch of its Nuvifone smartphones in the US.

The two models currently available run on Linux and Windows platforms but Garmin plans to launch an Android phone in America in 2010.

Spokesperson Jessica Myers admitted that Garmin was a latecomer to the competitive smartphone market.

"We've had a learning curve in bringing the phone to market," she told BBC News. "But have a lot of confidence in our new products - especially the Android-based ones."

Because of its plans to tap the market directly, Garmin has steered clear of developing applications for other Android phones (as well as the iPhone), focussing instead on apps for Blackberry, Windows and Symbian-based smartphones.

"Core technology"

TomTom meanwhile has aligned itself with Apple and launched a navigational application for the iPhone, which retails in the UK at £60.

By the end of October 2009, 80,000 people had downloaded the app, although sales were shaken in the US when Google launched a free sat-nav service for mobiles (not available in the UK).

The company, which out-bid Garmin to buy digital map supplier Tele Atlas in 2008, says it has no interest in developing its own handset.

"TomTom is initially a software developer," said Damian Woodward, vice president of sales at TomTom.

"We focus on the core technology. Getting a commercial model for a standard mobile phone is difficult."

There are an awful lot of GPS-enabled phones out there - very few people are physically using them for navigation
Damian Woodward, TomTom

Both Garmin and TomTom believe that the market for separate sat-nav devices has yet to reach saturation.

Mr Woodward points out that many people with camera phones still carry a separate digital camera, for example.

"There are an awful lot of GPS-enabled phones out there - very few people are physically using them for navigation," he said. "Mobile phone navigation is complementary to the market."

Jessica Myers at Garmin agrees that there is no "one size fits all" GPS-enabled device, and both companies blame the global recession rather than the rise of the smartphone for market decline.

Garmin's total revenue was down 10% year on year at the end of the third quarter of 2009.

"Our core competition is the current climate," says Mr Woodward. "70% of our business is based on personal navigation devices."

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