[Published March 16th 2006, https://web.archive.org/web/20061127141948/http://www.bitgain.com:80/blog/show/5]
While driving from my home town (Hoorn, The Netherlands) to Amsterdam, I saw a lot of cars with the small TomTom device mounted (with Velcro, mind you) on top of the dashboard. Although it looks a bit amateurish, many people really seem to like the driving directions it gives.
I wonder whether companies like TomTom, or its rival Garmin, can uphold the outrageous pricing level of their products. The avarage TomTom device costs a whopping EUR 600 and for what? The components inside the device cost no more than $80 I guess. And of course TomTom must license the map data from Navteq or TeleAtlas, and they have to finance expensive marketing campaigns (also in the US since a few months).
I'm always a sucker for scenarios in which a whole vertical market gets beaten by a killer app. I think the GPS device market runs such a risk. Bear with me for a moment:
- The TomTom software adds no spectacular value