Navigation in India: smooth sail or a bumpy ride

Indian customers want cheap and best

At SatNav, we have had the privilege of seeing the Indian GPS Navigation Industry from the year 2002, the time we launched our first voice based system, when comments like ‘who needs it?’, ‘my driver knows all the places’, ‘I prefer asking a panwallah to such devices’were the norm. Today the world has changed where the comments are, ‘why doesn’t it tell me the right way to my home?’ and ‘it’s a useful product’, ‘we appreciate you for bringing this technology to our country’, in the year 2008. So we no longer have the challenge of going into OEMs and other organisations to convince them of the need to have an In-Car Navigation, the consumer has spoken loud and clear, and he definitely wants GPS in India too. With our direct to consumer online strategy in 2007, we have ensured that the same has happened. True, not in the numbers that are prevalent in the developed economies but surely there is a demand curve that is getting defined.

Does this mean there will be a smooth sailing from this point on? In our opinion, based on extensive interaction with various stakeholders of the industry, definitely not. What is going to make the ride ahead bumpy are factors like; (a) Unrealistic promises being made by current vendors to the fledgling consumer base in terms of what the product can or cannot do, this is setting wrong expectations from the technology in general and needs to be rectified if the GPS Navigation market is avoid going the way the Tracking services market did over the last few years. (b) Another problem is that while the consumer is very clearly appreciative of what he/she is getting, the decision makers in the channels which can actually bring the product into the market are still very pessimistic about what they see.

We need to quickly convert those nonbelievers and and tell them that GPS is here to stay, whether you like it or not.

And the more time you lose the more your competition is gaining in the process. So all players need to be realistic in what they commit, don’t say things just to make a short term sale, focus on educating the market and entrench yourself for the long haul. The company which does this best, will have a smooth sail while others are headed for the bumpy road!

The market is still growing by leaps and bounds there, these are not likely to affect consumer demand as long as the vendors offer value to customers I always say, Indian customers want cheap and best, whoever can give it to them has a bright future ahead!

We may see a repeat of the Telecom story in the navigation space

Growth – India is going through rapid urbanization and the connectivity across cities is rapidly expanding with lots of new highways being built. More and more people are buying automobiles and traveling to near by hill stations, resorts, outlying townships etc. One can see a lot of movement of people across the county.

As movement increases it is our belief that navigation products will become an integral part of the lifestyle of the people at large for the reasons such as convenience, safety, security and comfort. Indian navigation industry is here to stay and grow. MapmyIndia believes as more and more players enter the Indian navigation marketplace, the overall market will expand and one should not be surprised if we see a repeat of the Telecom story in the navigation space.

Impediments – Navigation is given fact in the western world and also in countries like Japan, Korea. The biggest issue facing navigation today in India is lack of awareness. We believe since the large telecom operators and handset OEM are entering this space, the issue of awareness about navigation and GPS related products will soon be history and with the advent of 3G networks, navigation will be part of the mainstream solution on all sorts of mobility devices. Since India does not have legacy navigation products, the products will be based on the latest and greatest technology at prices that will be much more reduced than what they were The user in India is still new to navigation, slowly but surely we are seeing that the user is using map tools be it via the internet, or PND or mobile phones. In the last one year there has been a definite increased consumption of navigation products in India. The user wants the product to be highly local (my landmarks, my school, restaurants serving my favorite cuisines etc) such that the experience is much more enhanced.

Navigation is here to stay be it on dedicated devices or connected mobility devices as long as it serves a purpose from safety, security and convenience point of view. Navigable map data is the heart and soul of all navigation solutions and MapmyIndia is proud to provide to the Indian consumers what we believe is the best available map data in India. As we speak many new point of interest (landmarks) are being added which is a hybrid combination of user content which is validated by field surveys

The last mile is still a challenge

Bhai-sahab – a familiar salutation as one tries to find his or her way around towns in India. Can an In-car navigator replace this living breathing direction finder?

As one observes the entry of in car navigation systems into the Indian market one has to look at the next best alternative and try to differentiate their product offering against that alternative. In India this alternative is the proverbial ‘Bhai Sahab’ – the last mile navigator. Some will even hitch a ride with you to your destination and you don’t have to worry about leaving the charger at home! The last mile is still a challenge – I can navigate myself to Nainital from Delhi – having to still stop at a few places to get onto the right road segment. However, once in Nainital, how do I get to House # 4 in Joy Villa or to 15 Vernon Cottage Annex? Alas, I do have to resort to the neighborhood ‘Bhai Sahab’ for directions. This will change over time as content is created. With widespread infrastructure projects coming in Tier 1 and Tier 2 cities, navigable roads in India are changing weekly if not daily. How does a Portable Navigations Device (PND) navigate one through this mess? Isn’t a navigation system designed to accord this convenience to its owner?

Kudos to the pioneers like SatNav and MapmyIndia for introducing Indians to PNDs and in-car navigation. Technoenthusiasts have gobbled up these products and early adopters are experimenting with them. But is India ready for these products? I have to say that PNDs in India will have a bumpy ride. India is not ready for PNDs. The chasm between early adopters and mass adoption is huge – PNDs as single function device will have to compete with MP3 players and In-car video players. In India, when it comes to choices ‘Bollywood’ wins over others and in portable music and video players will win over PNDs.

Not all is doom and gloom and efforts to date are not lost. New classes of PNDs, with media playing capability, are being launched. These devices can play music, video, pictures as well as offer navigation capability. Navigation is a ‘secondary’ function as opposed to a ‘primary’ function. The channel for sales of these devices is also different. These devices, if positioned properly, have the potential to catch tailwind and ride smoothly blaring ‘Suhana safar aau yeh mausam hasin, hamen dar hai ham kno na jayen kahin’ while the navigator stops one from getting lost on country roads.

Those who survive the initial bumpy ride would be there to reap the benefits later

Indian consumers have always been very open in adapting to affordable new technology products. Be it Walkman in 80’s, Radio Pagers in 90’s or Cell Phone in this decade – the gadgets have always adorned the life style like never before. The latter half of this decade saw the prices of products like Blue tooth, Mobile Camera, GPRS, Wireless etc plummeting and eventually they reaching the commodity status.

With improved lifestyles in India, automotive market has witnessed a big boom in the recent years. The recent trend has been that of incorporating cutting edge technologies in the areas of Safety (ABS, ESP, Airbags etc), Engine Management (Common Rail, Hybrid, Exhaust etc) and Multimedia (Audio, Video, Bluetooth) in the cars. Increased convergence with Consumer Electronics and corresponding decrease in the prices has resulted in car multimedia devices forcing their way into entry- & mid-car segments. Entry of Navigation systems is one such recent development in India.

From the outset, being one of the fastest growing automotive markets in the world, the market opportunities appear very attractive for Navigation systems in India. Also, relatively few players in this space offer unparallel advantages to the early entrants. However, vendors may not find it very easy to sustain the opportunities.

This is primarily due to the combination of infrastructure & technological reasons. Essential requirements, for a Navigation unit to calculate route properly, such as comprehensive road network data, reliable street information (one ways, parking areas, speed limits, signals etc), structured address format, rule-compliant traffic behavior etc, are not default parameters in India. This poses a huge challenge to the technical community and calls for creating innovative solutions. From an entrepreneurial angle, ironically, these very challenges and unique business opportunities in the areas of LBS (Location Based Services), Remote Assistance, Telematics, Toll Collection etc, offer enough reasons to conduct business in India.

Finally, adopting out-of-the box business models to keep the volumes high and at the same time cost of ownership to the customer low would be another critical success factor. For example, cost/mode of the map updates will be one of those decisive factors. Other factors such as Licensing & Government Policies, Forums & Bodies influencing the policies, would also play a significant role in determining the journey next.

In summary, Indian context offers enough challenges early-on. Those who survive the initial bumpy ride would be there to reap the benefits later, for it is hard to ignore India! It is even more interesting that Blaupunkt, the Inventor of Car Navigation has entered the market at this stage in India.

It gives me a feeling that we can expect very interesting developments for the Indian consumer in the near future.

Providing accurate and useful maps for Indian roads and cities is a formidable challenge

With unveiling of the revolutionary Tata “Nano” small car having a huge market potential, India has captured attention of all major automotive technology vendors. The satellite based land-vehicle navigation is one such technology. The improving roadways infrastructure, rapidly increasing number of mobile phone users and review of regulatory policies on use of Digital Maps are some of the factors which have resulted into introduction of several “Navigation and Route Guidance” solutions for passenger cars in the Indian market. Major players have entered in the Indian market with products based on both dedicated Personal Navigation Devices and mobile handsets with built-in GPS.

In order to enable a smooth ride for the customer when using the navigation technology, various stakeholders like navigation device vendors, vehicle manufacturers, service providers and government regulatory agencies will have to work together for the common goal of satisfaction and safety of the customer From customer’s perspective, although availability of international grade systems is a desirable situation, it is necessary to scrutinize the utility of various features provided and the cost of ownership of a car navigation system. In addition to accurate and reliable route guidance system , the customer will expect features like traffic and weather information, voice based navigation in Indian languages, localized travel related information, hands-free voice communication, seamless integration with devices like i-pod and so on. The device vendors will have to meet these

PND in India definitely holds a lot of potential, but it will not be “bed of roses”

It is still too early to say about the incar navigation’s success in India, as the navigation segment is in its infancy stage here. Globally, the PND (Personal Navigation Device) is a promising product category with market penetration of only about 6%, thus offering a big opportunity for all the players in the supply chain of this industry. Western Europe and North America currently stand at 15% and 4% respectively.

With the rapid growth of the GPS market in countries like China and India, majority of the navigation devices are anticipated to be shipped in the Asia-Pacific region by 2012. Lack of high quality map data and regional variances in navigating set some obstacles for navigation market’s growth in Asia. As an example, in some countries people are accustomed to navigate by landmarks rather than the street names, which might not even exist.

In India, people are still unaware of GPS, but the navigation industry is expected to grow as new improved maps and navigation products are being launched in major cities. Though the satellite navigation industry has high barriers of entry; the enormous market opportunity is attracting a slew of players. Few leading players who are early to market with the best quality maps, large geographic coverage, userfriendly UI and a good after-sales support, are to dominate the market.

Brightpoint India is also looking at this opportunity. Having the vision ‘to be the market leader in the distribution of navigation devices’, Brightpoint has developed great relationships with leaders like Garmin in the PND space. In India, a lot has to be done to educate the market about the benefits of navigation. Consumers ask – “why should I buy this navigation device?” PND devices are still rather expensive for an average Indian consumer, and people are confused about the cost of navigation. PND can help finding a way to a destination and to reduce the travel time, but directions can also be sought by asking any passerby. So, what will be the influencing factor for a consumer to make the purchase decision?

To create that “value for money” proposition, synergies have to be met. Indian government has to reduce import & local taxes and navigation companies have to promote the benefits such as safety for women travelers, route planning, effective time utilization etc. Furthermore, Value Added Services such as live traffic updates and on-line hotel bookings can increase the attention for PND devices. Today Nokia is creating the navigation category in mobile phones, and it could well be so that Indian consumers will opt to skip the PNDs and go with the improved navigation experience offered by mobiles.

Worldwide statistics from 2007 show that PNDs dominated the GPS device market with more than 90% market share. So, PND in India definitely holds a lot of potential, but it certainly will not be a “bed of roses”.