US: Telenav says free navigation is actually helping business

The mere thought of Google’s continued expansion into the mobile navigation market is enough to make any mobile navigation provider nervous. Yet mobile GPS maker TeleNav argues that Google’s encroachment is aiding, not harming, its business.

TeleNav’s position is all the more striking given that Google just announced it would expand its free navigation software to 10 European countries and Canada. Previously, the Internet giant’s Google Maps Navigation service was only available in the U.S. and U.K.

Sal Dhanani, TeleNav’s vice president of products and marketing, contends that Google’s moves are raising awareness about mobile navigation in general, ultimately helping TeleNav sell more subscriptions to its own services.

The Sunnyvale, Calif.-based company provides navigation software to AT&T, Sprint Nextel and T-Mobile USA, as well as about a dozen other operators in Canada, South America, the U.K. and China. Prices range from $7 to $10 a month, depending on the carrier.

“Mobile location-based services keep growing,” says Dhanani, noting that TeleNav added 2 million new users in the first quarter of the year for a total of 14.5 million subscribers worldwide. As evidence that TeleNav still has plenty of room to grow, he cites research that 50% to 60% of Americans are interested in paid mobile navigation, but only 7% currently use such a service.

Dhanani also believes Google, Nokia and Microsoft’s software is flawed. Google, for instance, uses hard-to-decipher text-to-speech technology for its directions instead of human voices. Nokia’s map data is high-quality, but its software design is clunky and the company doesn’t sell many phones in the U.S., says Dhanani. Bing Maps is limited to Microsoft devices. “These services will improve, but it’s a question of how quickly,” says Dhanani. “We’ve put billions into this already.”

TeleNav has started hedging its bets, preparing for a possible future beyond subscriptions and even beyond cellphones. The company began experimenting with mobile ads and commerce about six months ago. The ads appear as “sponsored listings” within TeleNav’s applications. Search for “birthday cake,” for instance, and a listing for the nearest Costco might pop up, along with an address and directions. Users can also purchase movie tickets through their TeleNav apps, thanks to a partnership with Fandango. TeleNav gets a cut of each sale.

The next step, says Dhanani, is premium services. He’s coy about the details, but says TeleNav plans to offer location-based data besides navigation as separate, add-on services. The idea is to produce something targeted so precisely to, say, business travelers that they will spring for the additional expense.

Beyond phones, TeleNav provides navigation to Ford’s Sync in-car communications system and sells GPS-enabled mobile workforce management software to corporations. “We have multiple businesses, all of which are forecasted to grow reasonably well,” says Dhanani. With Google as a growing rival, that may prove to be a smart strategy.

Courtesy: Forbes.

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