Inside money, markets, and Big Tech

This article was published on April 29, 2008


    Navigation 2.0 – What social computing could add to the stagnating navigation market

    Navigation 2.0 – What social computing could add to the stagnating navigation market
    Eric Bun
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    Eric Bun

    Eric is a business innovation consultant at a large management consulting firm in the Netherlands. He helps organizations defining their web Eric is a business innovation consultant at a large management consulting firm in the Netherlands. He helps organizations defining their web and e-business strategies, deploying social innovation and aligning business innovation to strategic objectives. Eric is graduated at the TU Delft on the subject of managing Communities of Practice in 2007. He has interest in deploying new (e-)businesses and is happy to be involved in relating topics such as co-creation, brand hijacking, e-marketing and innovation strategies.

    TomTom CommunityLast weeks, multiple Dutch political parties debated about the potential of navigation devices in order to solve (or at least helping reduce) the traffic jams and congestion issues in the Netherlands. They argued about whether or not new generation of navigation devices should be able to reduce congestion problems and what kind of applications and functionalities would be required. In my opinion, it was a debate with a great value (though newspapers as well as bloggers don’t covered the debate!), both for society as manufacturers because it referred to a hot topic and the debate uncovered the urgency of navigation manufacturers to open up new markets and business models. The borderline: social computing (e.g. co-creation, crowdsourcing, mass participation or whatever buzzword you prefer) added to the next generation of navigation devices could help to inform and instruct drivers in a more adequate way resulting in a better transport flow and a better customer experience.

    In this post, I would like to share some ideas regarding the next generation navigation devices and the relevancy and urgency for this mature market.

    Continuous decreasing prices

    Although the market of navigation devices is relative young, it is already very mature both due to the relative low entry barriers and the greatest of ease to copy existing business models. As a result, more and more companies are entering this market, prices are dropping and radical innovation (incremental yes, but radical) lags. Even the most promising companies of 2007 named TomTom, has not been able to please shareholders in 2008 and as a result share prices dropped dramatically, see figure below.

    TomTom - Shareholders are not happy

    Main reason in my opinion; market has become mature and promising forecasts on radical innovation is lacking. (Reason according to shareholders and analysts: “Navigation devices are more and more based on proven technologies, the market is influenced aggressive competitors and decreasing prices of the devices harms operation margins.”)

    New e-business models and radical innovation

    The public debates by the political parties created food for thought for the manufacturers and myself. TomTom (or a similar capable navigation manufacturer) is able to open up new markets and design new business models by elaborating on the social computing aspect. I personally believe in adding a seamless convergence between navigation devices, mobile phones and online web. People should be able to make amendations online (via the website) and offline via the navigation device or mobile phone. The amendations made should be shared real-time within a particular community or in the whole consumergroup (depending on the type of amendation or update). In the picture below, I sketched an overview of the developments in the navigation market and added my personal perspective on the ‘desired scenario’ (top-right).

    tomtom

    More on my perspective (I would like to start a new discussion on what is possible and what might be added required in terms of a community driven innovation navigation market):

    • Online advanced, customized community platform
    • Members can share, upload new maps & routes via different channels (online, navigation device and phone) (seamless convergence!)
    • Actual traffic information is automatically recognized. For instance by the automatic updates sensed by the density of the Vodafone mobile user base, but also by community members who can report an accident or traffic jam themselves via the system.
    • Community can design new user-interfaces via the online platform and share it in particular communities
    • New ammendations to the navigation device can be supposed by an interactive online designing platform. Think of a contest of designing the new TomTom.
    • Business models could be based on the actual usage of the services distracted by the level of participation in the community. In other words, people that upload quality amendations, report lots of traffic updates will get discounts on the service. Community members are able to value members’ contributions

    Well, I got a lot more ideas, but as always, I would like your opinion. Would social computing open up new business models for TomTom?