“It is now a week Google announced a free turn-by-turn navigation application for Android, and the industry is still trying to evaluate the impact it will have.
The threat is still theoretical since Google application is (1) for Android only, (2) off-board and therefore not necessarily reliable, (3) only based on US maps and (4) not tested yet by anyone.
However, the potential disruption in the market is clear. We can only imagine the sort of discussion taking place at Garmin regarding the Nuvifone, at TomTom regarding their mobile strategy, at mobile operators regarding their promised LBS revenues, at Telenav regarding their announced IPO.
In the short term, we think it will clearly trigger a defensive reaction from most of the big players. We can anticipate Apple and Nokia to prevent Google from placing its navigation application on their store. By the same token, big mobile operators will probably build fences and remove Google navigation app from their Android phones.
In the long term, let’s face it: navigation is becoming a commodity. Advertising will be a valid business model, specially for Google. Others will have to come up with creative business models. Smaller players will seize the opportunity and innovation will burst.”