STRATEGY & INNOVATION ARTICLES
Disrupt-O-Meter
Disrupt-O-Meter: Dash Express vs. Garmin Nuvi
Renee Hopkins printed September 11, 2008 | Volume 6 | Number 5
/ Disrupt-O-Meter, consumer electronics disruptive competitor wireless /
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GPS device maker Garmin enjoys the lion’s share of the multibillion U.S. GPS device market. Yet its stock has tumbled 75 percent in the last year, partly due to fears that the GPS device market is about to be disrupted in a major way by GPS-enabled cell phones.
The market shows classic signs of over-serving its customers: According to Fortune, Garmin's latest GPS device, the Nuvi 880, “has it all: directions, MP3 player for listening to songs and books, a photo viewer — even an alarm clock … because these are tough times for GPS makers. Demand is slowing and prices are falling fast, in part due to competition from cell phone manufacturers like BlackBerry maker Research in Motion and Apple.”
GPS-enabled phones do not currently offer the gold standard of GPS service: voice-based turn-by-turn directions. But this functionality is predicted to be perhaps as little as a year away from showing up in 3G iPhones. Also, both Garmin and Nokia are developing mobile phones with this functionality (Garmin’s Nuviphone is set to debut in early 2009).
Into this climate competitor Dash launched in March the Express, a wifi-equipped GPS device that tracks its users’ positions and speeds and then turns that data into real-time traffic information. In June, Dash released a software update and developer API for the Express that permits outside developers to create software to work with Dash. This allows for “mash-ups” that allow Dash Express to perform such services as looking up the cheapest gas prices near you at the moment. How does Dash Express compare with market leader Garmin’s Nuvi offering?
| Garmin Nuvi | ||
| New GPS users, commuters and fans of mash-ups (winner) | CUSTOMER | Traditional GPS users who want the latest bells and whistles |
| An interconnected, send-and-receive device open to outside app developers (winner) | SOLUTION | State of the art in GPS navigation and add-ons |
| Sell devices ($299) and ongoing $12/month network fee which edges GPS toward a fee-based service (winner) | BUSINESS MODEL |
Sell devices ($300 to $1100) |
| If network idea proves popular, subsequent established user base would make concept difficult to replicate (winner) | COMPETITIVE LANDSCAPE |
Market leader trying to stave off disruption by 3G mobile phones |
More Disruptive: Dash Express. Shipments of GPS-enabled phones are to more than double over the next five years to a $100 billion market by 2012. And in a year or so, Nokia, Garmin, and the iPhone will likely all offer voice-based, turn-by-turn directions on relatively large screens. At that point Dash Express GPS units may be relegated to the tech-history junk heap.
But maybe not. Dash has a great concept, and if Dash is simple enough to use that its rate of adoption grows, that adoption could lead to network growth that would guarantee real-time traffic information. If enough developers take advantage of the fun and freedom mash-ups provide, Dash could become a focal point for a variety of location-based in-car services. Dash could grow a user base that might be reluctant to leave it behind in favor of their phones, which will always offer a smaller, more inferior screen than a dedicated GPS device. Or perhaps the network idea will be picked up by a competitor with deep enough pockets to replicate it.
The only really clear aspect to this is that Garmin’s traditional GPS devices are well on their way to overshooting new customers and being disrupted.