Satellite Navigation: The only way is up

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The satellite navigation sector has risen rapidly in recent years, and was the fastest growing CE product sector in 2006. Libby Plummer looks at the opportunities presented by these devices.
According to GfK data, satellite navigation (or Sat Nav) was the fastest growing consumer electronics sector in 2006. Annual sales of these products (also known as Portable Navigations Units – PNUs) for the last year, were well over double those recorded for 2005, bringing the total sales to date to around 2.3 million units. Prices have fallen dramatically, with average prices now at around £200, and add to that the fact that less than one in ten cars in the UK have Sat Nav units fitted, and it’s easy to see that the sales potential is enormous.

The technology

So, how do these devices work? Colin Holloway, PR and Internet director for Navman Europe, explains the basics: “Sat Navs work using GPS (Global Positioning System) technology. They communicate with satellites orbiting the Earth so that, through triangulation, they can tell where in the world you are. You can input the destination you want to reach into your Sat Nav – the device then uses mapping data to calculate an appropriate route to get you where you want to be.”

The explosion in popularity of Sat Nav devices hinges largely on several key user benefits, put simply, they make driving easier, safer and less stressful. Lionel Irving, general manager for Mobile Entertainment at JVC, focuses on the safety aspect, stating: “A driver with Sat Nav is able to concentrate on the road ahead and vehicles around them, while the unit takes care of navigation. This is much safer than looking at a map or directions whilst driving”.

Daniel Aziz, marketing manager for LG’s Digital Media and Car Infotainment Group, believes that the devices can also be important in dealing with unexpected circumstances. “Sat Nav devices can help users in an emergency. For example, if you break down in a car, the user can identify exactly where they are.”

Several recent scare stories in the press about lorries stuck in villages or cars being directed into rivers or dead ends could put some consumers off. However, as Colin Holloway Europe puts it: “There are only drawbacks to Sat Navs – as with any other kind of technology – when they are not used properly and with common sense. If your Sat Nav directs you down a road that is too narrow for your vehicle, remember that your device doesn’t know if you’re in a Mini Cooper or an HGV!”.

Car crime is another drawback commonly associated with Sat Nav devices. Most manufacturers recommend that users always remove their Sat Nav device from their car when it is left unattended.

New direction

The usability of these devices has improved significantly during recent years, as Daniel Aziz of LG puts it: “The technology was originally designed and developed by the armed services and later adopted for commercial use. It has taken some time to bring an advanced technology, which began life as a tremendously expensive and cumbersome piece of kit, to a compact and affordable gadget that can fit onto the windscreen of a car”.

As well as the reassurance of having such a device, especially in case of an emergency, such as a car breakdown, the devices can also be used for more leisurely pursuits. Leo Exter, of Mio Technology Europe, explains: “People are beginning to see the benefits of Sat Nav out of the car. With new slimmer devices and a built-in pedestrian mode, Mio customers are also using their Sat Navs to explore cities and towns”.

Sat Nav devices have seen some rapid innovation over the last year or so; becoming smaller and more portable, with new features constantly being brought to market.

Widescreens, and also touch screens are now commonplace, and not just on the most expensive models. Roadstar’s Navigazione features a 4in LCD touch screen, as well as boasting a 512mb internal Flash memory for storing MP3 files – another feature which is becoming more common.

Faster and more efficient

The speed of operation, has also improved immensely. Mio’s Leo Exter explains: “Sat Navs are much quicker. They pick up satellites within seconds rather than minutes, even with full cloud cover. Route calculation is now seconds rather than tens of seconds. Most devices also now support full postcode address search. All making it much quicker to go from power-on to driving.

“There are also more features and more routing options, giving people greater choice about the routes they take and how they drive them”.

Live traffic information – a key concern – has also seen marked improvement, says JVC’s Lionel Irving. “One development is dynamic traffic information, whereby ‘live incident information’ is received and alternative routes offered automatically. Safety camera information is also a key innovation. Also, speed limit indication is an interesting development, since accurate information can be sourced easily.”

Navman has developed a unique technology called NavPix. These are a series of digital images of interesting locations with the geographical data embedded into them. NavPix can be downloaded from an extensive online library onto the user’s Navman device. Then, all the user needs to do is click in the image and they will be automatically directed there.

Convergence with other devices is also becoming more common – with several manufacturers introducing Bluetooth capability and mobile phones with built-in Sat Nav. One such example is Mio, which also recently introduced a Sat Nav multimedia player.

A wide choice

With all these features, there is a far wider choice for consumer when it comes to Sat Nav devices, from easily affordable entry level products to more sophisticated devices, with price tags to match. Sat Nav pioneer TomTom offers a wide selection, explains spokesperson Laura Murden, commenting: “The TomTom One range, which is the value product offers a complete navigation solution, including touch screen ad postcode entry, for an affordable price. This product has now become the best-selling Sat Nav product in the world. The TomTom GO range offers a complete solution, plus some additional features, such as Bluetooth hands free calling, safety camera database and iPod connectivity”.

Manufacturers are slowly taking Sat Nav products through to the indies, having previously concentrated largely on the multiples, in particular car specialists such as Halfords. For example, Mio has a selection of PoS material specially designed for retailers to help promote the products, and also has field marketing teams on hand to offer additional support to retailers.

TomTom also offers an extensive range of PoS materials, including counter unit displays with live products. The manufacturer also has a merchandising team which visits stores to offer training support.

TomTom’s Laura Murden has the last word, commenting: “Portable satellite navigation systems are fast becoming a must-have item, however, there is still a lot of explaining to do on the shop floor. Therefore, there is a huge potential for retailers to have knowledgeable staff who can sell up through the range and explain the features to the customer, therefore turning an interest into a sale.”

Sales tips:

• Know your stuff – try the product for yourself and learn how they work.

• Listen to the customers needs – select a product that is right for them.

• Keep it simple – don’t try to demonstrate every single feature.

• Manage expectations – there are limitations and by letting the customer know this, they are less likely to be dissatisfied.

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