Candid conversations about using GPS and wireless technology for work and fun.
The Benefits of a Subscription Service
Happy Monday everyone! This post is going to focus on something that always seems to come up in conversations regarding mobile navigation applications vs. stand alone personal navigation devices (PNDs) . . . is the subscription service worth it? It isn’t uncommon for one of our mobile navigation applications, such as TeleNav GPS Navigator, or our connected PND, TeleNav Shotgun, to receive a great review for the features and navigation experience they provide only to have people point out that the subscription cost impacts their overall opinion of the product. Here’s an example of an excellent review from the folks at Kicking Tires that takes this stance. After reading the review, we though it might be helpful to point out some of the benefits a subscription service provides over a traditional PND.
- Map information is continually updated – Some people might not realize that the major map providers issue map updates every quarter to ensure that new roads and addresses are continually added and updated. With most stand alone PNDs that carry a low price tag, you basically get the most recent map that was on the device when you purchased it. If you plan to have your device for three years without paying to upgrade it, you’re being routed on three year old maps. Think about if you bought a mobile phone and you only had access to the contacts you knew at the time you bought it. It wouldn’t be that helpful for new people you meet in the future if they couldn’t be added to your contacts, would it? If you want to update your PND to ensure you have updated maps, it’s going to cost you. Now that $100 device suddenly becomes a $200 device. With a subscription service, you can always be assured that you are driving with the most up-to-date maps delivered by the mapping providers.
- Updated Points of Interest (POIs) - Similar to maps, business listings often change. What was once your favorite Chinese Restaurant may now be an antique shop. While many of the low priced PNDs feature POI databases ranging from approximately 3-5 million listings, this is stagnant data. Once again, if your device is three years old, than you are taking the chance of navigating to a restaurant that closed two years before. Your device has no way of knowing this information. Just the other day a friend of mine told me that he was using a GPS device to find a grocery store and when he arrived at the destination, there was no grocery store in sight. Again, if you want to keep your POI database updated on lower priced PNDs, it’s going to cost you extra. Not with a subscription service such as ours, which keeps an up-to-date database of more than 10 million business listings.
- Connectivity is Power – One of the key differentiators between subscription services and standard PNDs is the connectivity a subscription service offers. With connectivity, your device goes from being filled with stagnant data to a dynamic data machine that can deliver real-time information that impacts your daily decisions. One example would be the delivery of daily gas prices, which becomes very handy in summer months when gas prices traditionally rise. In these economic times, if you can save $3 at the pump from finding the best gas prices in your area, it adds up. Three tanks of gas pays for your subscription service. Another example is the ability to receive traffic commute alerts. Through connectivity, our service can send you an SMS or e-mail alert every day at your chosen time to let you know what’s happening at that moment in time along your commute. If it’s better to stay in the office to get a little more work done than to drive right into a traffic jam, you’ll know. A $100 PND won’t do that for you.
- Convenience - One of the most basic, but often overlooked benefits of a subscription service is the convenience it provides to you. It’s easy and convenient to use your phone, something you have with you all of the time, for multiple functions. TeleNav GPS Navigator provides a full-featured, connected navigation experience. So why lug around two devices with you when you can get everything you need from your phone? It also makes it much easier to pull out your phone at any time, whether you’re walking around an unfamiliar area or in your home trying to plan an upcoming trip, and fire up the navigation application to get the information you need. Although some PNDs have pedestrian modes, it’s not very convenient to pop it out of your car and take it with you when walking around a city. It’s just another thing you have to carry around. I think we all have enough gadgets and gizmos to tote around the way it is, so the more we can fit into one device, the better.
There are obviously benefits to both solutions and based on your economic situation and the features you want from your device, you can be certain there is a device out there that suits your needs. However, if you look at the benefits a subscription service offers, that $9.99 monthly fee might not be unreasonable after all.
Let us know what you think about this topic. As our business continues to change and technology becomes more advanced, I’m sure this conversation is one that won’t end soon.
about 1 year ago
While I don’t disagree with anything written above, in my opinion, every PND manufacturer that has gone down this road (or started to) has marketed this wrong. I believe that consumers have a very weak appetite for the cost of connected services. They like the features but not the cost. Whether it is Dash or more conventional MSN Direct, the subscription cost is hard to shallow. People were intrigued by Inrix and other higher bandwidth advanced traffic solutions and were willing to pay more for that for awhile. But over time, commentary I read suggests that people are realizing that these higher bandwidth advanced solutions are only incrementally better than regular old FM-TMC traffic and not worth much per month in terms of a subscription cost.
Amazon has marketed the Kindle in a genius way. They sell the connected features of the Kindle but don’t sell the connectivity itself. In other words, the customer gets a piece of connected hardware, but never sees a subscription cost. Part of the subscription cost is embedded in the cost of the hardware. They rest is paid for incrementally over time when they buy new books. They use a CDMA network that is transparent to the user and never costs the user a dime.
Customer ARE willing to spend money on map updates. They’ve done it every year for years. I believe that PND manufacturers need to focus the marketing of their subscription services on the map / POI updates and not the connected aspects of the PND. Make the connectivity disappear to the end user like the Amazon Kindle. Sell map updates like they sell electronic books. Customers will swallow the costs a lot better when they view it as a cost they are used to paying.
about 1 year ago
Jalan, thanks for your continued feedback on our blog and for the insights you shared regarding subscription services. As you’ve noted, some of the new business models being used by companies such as Amazon for the Kindle are interesting and offer a new way to provide services to consumers. You can be assured that we are continually focused on providing the best options for our users in terms of product features and our subscription model. We feel that our current subscription model is appealing to many users, as evidenced by AT&T’s recent announcement that AT&T Navigator (powered by TeleNav) was the company’s top selling app in Q1.
about 1 year ago
In speaking of subscription models, I was speaking more in terms of a connected PND than I was of software that runs on cell phone, which the AT&T announcement was about. The difference, of course, being the large upfront cost of the PND followed by monthly subscription fees. I haven’t seen anyone nail the value proposition of the connected PND model yet. A simple $9.95 per month with no upfront fee for the cell phone software is a much different value proposition and fairly easy to justify. If I can run TeleNav on a Samsung Instinct for $9.95 per month (which I do), it significantly brings into question the value of spending several hundred dollars upfront for a connected PND.
Take the monthly connected fee of the PND and rebrand it as a quarterly online map/POI subscription update service and I think it sits much better with consumers. Of course, you still have to get over the hurdle of justifying the initial upfront cost of the connected PND (harder to do when touch screen phones are starting to approach a PND’s size).
about 1 year ago
From an end user’s point of view, I’ve had Telenav on my AT&T Samsung Blackjack 2 for a year now. I pay $9.95 per month which is included in my monthly AT&T bill. I love the app and could not function without it. About 5 months ago, I wanted the iphone so bad that I purchased it as a second line on my account, but returned it when I found out there is no voice navigation on the iphone…that’s how important the app is to me. What good are gps maps when you’re driving? It’s got to be voice navigation. The subscription model is fine as long as current prices remain stable. Now if Apple would just get navigation on the new upcoming iphone 3.