Mapping apps take on navigation systems

  • Article by: KEITH NAUGHTON , Bloomberg News
  • Updated: July 19, 2013 - 1:00 AM
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The Waze mapping app allows people to use their smartphones to report traffic jams and accidents. The app can then reroute users onto a faster path.

Photo: Chris Ratcliffe • Bloomberg News,

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Tim Nixon, chief technology officer of General Motors’s OnStar service, knew something was amiss when he saw his two sons taking the “suction-cup approach” to in-car navigation: They would turn their iPhones sideways, stick them to the windshield and use a free map app to find their way.

That represented a rejection of their father’s work: convincing car buyers to pay $1,500 or more for a dashboard navigation system with an 8-inch screen and elaborate graphics.

Nixon came up with an answer: GM now offers a $50 map application for iPhones that can play on the dashboard touchscreen of a $12,170 Chevrolet Spark.

“We’ve historically had these onboard, embedded nav systems,” Nixon said. “That’s just not going to cut it anymore. The game has changed and the bar has been raised by these always-connected devices that bring fresh information into the car.”

As more people use smartphones to traverse their daily drive, automakers’ pricey and profitable in-car navigation systems are threatened. The reason is simple: Many map apps are free while embedded nav systems run from $500 to more than $2,000.

Even more compelling is the emergence of social-networking map apps like Waze. “Wazers,” as the app’s 48 million users call themselves, touch prompts on their smartphone to report traffic jams and accidents and then the app reroutes them onto a faster path. Last month, Google outbid Facebook to acquire Waze, paying about $1.1 billion for the app maker with offices in Israel and Palo Alto, Calif.

“If you have a choice between paying a lot of money on an expensive in-car nav system or a free app on your iPhone, which are you going to choose?” Di-Ann Eisnor, head of Waze’s U.S. business, said in an interview. “It is a considerable threat” to automakers.

Even mapping-device providers, such as Garmin and TomTom, now offer apps that run on phones.

Until now, most in-car navigations systems haven’t been connected to the Web. Instead, they use maps loaded onto DVDs that work with global positioning satellites to plot a course. Those maps become dated quickly, especially as points of interest, such as coffee shops and gas stations, open and close. Smartphone apps have fresher maps and points of interest because they constantly pull new data from the Internet.

“If you want to update the maps in your car, it’s an expensive and complicated process of having to go to the dealership,” said John Canali, who tracks the navigation business for Strategy Analytics in Boston. “With the smartphone, a lot of applications have the maps refreshed regularly.”

Satisfaction fell last year among car owners with nav systems, according to a survey by J.D. Power & Associates. The biggest complaint is the difficulty in usage. And 46 percent of car owners with a factory-installed navigation system told J.D. Power they wouldn’t buy one again if their smartphone app could play on their dashboard screen.

“Many people view their smartphone as having better processing speed, better points of interest and better map data,” said Mike VanNieuwkyuk, J.D. Power’s executive director of global automotive research.

Automakers are embracing the challenge and scrambling to re-engineer their nav systems to make them compatible with smartphones.

“We look at it as an opportunity,” Marios Zenios, vice president of Chrysler’s Uconnect infotainment system. “All this capability, including Waze, is sitting on the cloud, it’s not sitting on the phone. We are able to go to the cloud through their phone, bring the information down and display it on our screen.”

Waze will make its first appearance on a car later this year, said Eisnor. It’s with a Japanese automaker that she declined to identify. “We’ve had conversations with everyone,” Eisnor said of the interest Waze is getting from major automakers.

Cars and mobile map apps will ultimately merge because each complements the other’s strengths, said Michelle Moody, Ford’s consumer tech marketing manager. Cars have a stronger GPS connection and larger display screen. Phone apps have the latest maps and users providing real-time traffic updates. “The reality is neither one is a perfect solution,” Moody said. “Together, they might be a perfect solution.”

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