SatNav  the profit proposition

Long gone are the days of boxy SatNav units, which cost close to a grand and are fixed to the dash-board. Basic hand-held SatNav systems retail for less than £199 nowadays.
SatNav systems are finding their ways on to mobile phones too. T-Mobile, Orange and 3 are offering various SatNav-on-a-mobile bundles to dealers. SatNav has, then, entered the mainstream mobile market at last..
Unlike the TomTom products that were popular in Halfords and suchlike last Christmas, this new generation of smartphone SatNav systems is different in that the SatNav application runs on the mobile, rather than a dedicated unit.
A new generation of smartphones, such as the T-Mobile MDA Compact III announced earlier this month, have a GPS receiver built into their electronics as standard. More are expected to hit the market in the coming months.
For the time being, however, most smartphone users will have to content themselves with a SatNav application that runs on their mobile, plus a Bluetooth-enabled device that sits on the car dashboard, receives GPS signals (see box, over page) and relays them to the user ‘s handset.
3 has a single SatNav option available to its dealers in the shape of a TomTom Navigator 6 add-on for the Nokia E61 handset, which sells for £99 on top of customers ‘ regular contract packages.
Both the TomTom SatNav and its UK/European maps are stored on a plug-in card for the E61, which gives users access to driving maps of the UK and Europe, together with pedestrian maps for when the user is on foot.
Using 3 ‘s mobile data facilities allows users to get access to real-time updates to the maps, as well as traffic, speed camera and weather alerts, in return for a monthly subscription.
As a sweetener to new users, 3 is offering the first three months ‘ subscription to its traffic, speed camera and weather alerts free of charge.
While Orange has a single £150 add-on available for most of its high-end smartphones (see box, over page) T-Mobile has taken a multi-pronged approach for its business and consumer users.
In the spring of this year, T-Mobile released a range of Co-Pilot SatNav-enabled mobiles, which include the MDA Compact II, the SDA II and the Vario series, as well as the Nokia N70, all aimed at the business users.

New channels
Autumn saw the company extend its SatNav offerings into the small business/consumer channel with a Co-Pilot-based system released for the Vario II and Nokia ‘s E61 and N71.
These second generation SatNav systems do everything the first generation of Co-Pilot systems did, including spoken turn-by-turn instructions, but with the addition of a constantly-updated web page with the mobile ‘s location.
The free-to-use web page allows authorised users, which usually means office staff, to see where the driver is located.
David Quin is European marketing director of ALK Technologies, the firm that developed the Co-Pilot system. He believes that this feature is something of a killer application for SatNav.
For the first time it means that a small business can tell where someone is and either allocate new jobs to them via text, or over the phone, without having to buy expensive fleet management systems and software, he says.
Even better, says Quin, T-Mobile is offering the SatNav bundle of a Bluetooth-enabled GPS receiver and card-based software/maps free of charge, within a high-end contract deal.
If the dealer adds on a £7.50 a month Web ܘn ‘ Walk flat-rate data deal, then there are no extra data charges involved, no matter how much data flows between the mobile and the network, he says.
The new MDA Compact III bundle, announced earlier this month, even moves the GPS receiver onboard the mobile phone. This, says, Quin, makes the SatNav function highly attractive as it creates a single unit solution that can even be used by pedestrians when they leave the vehicle.
This is a major advantage, as it removes the problem of leaving the GPS unit, or even a dedicated TomTom unit, in the vehicle, for car thieves to spot, he says.
I believe the MDA Compact III will become a best-seller in the channel, as it creates a single unit SatNav offering for consumers for the first time. I think it will propel SatNav into the mainstream, he tells Mobile News.
While the MDA Compact III will be many dealer ‘s first encounter with the delights of smartphone-based SatNav, Quin reckons T-Mobile has been actively promoting SatNav systems  based on the Co-Pilot technology  since the spring of this year.
If you take the SDA-II (AKA the Orange SPV 600), which was, I have to say, a bit of a clunky handset, users were mainly buying it for the SatNav facilities. This is what makes me think that SatNav is primed to be a killer application on mobiles, he says.
Because of this, Quin ‘s firm has been working closely with T-Mobile on promoting mobile phone SatNav to the dealer channel since the summer.
SatNav really gives the sales guys something to talk about  it ‘s a useful service. It ‘s not a football download that you use once and later regret  it ‘s something you can use again and again, he explains.

Expanding handset range
Quin is also working with T-Mobile on expanding the range of mobiles that can have SatNav add-ons.
Later this year we ‘ll have SatNav available on the Sony-Ericsson M600i and the P990, and there will be others in 2007, but I am very confident about the new MDA Compact III because of its onboard GPS facilities, he says.
T-Mobile ‘s Jote Bassi, the company ‘s marketing manager for data is also keen to promote SatNav through the dealer channel.
It ‘s a very powerful proposition for a mobile, he says. There are now a number of T-Mobile SatNav offers available for different segments of the market.
Interestingly, Bassi says that, although 3G coverage increases the rate at which map updates and traffic information is downloaded, GPRS is quite sufficient for most users.
With our SatNav offering, the map data is stored on a card in the mobile, so the need for speed on the data transfer front is not as great as, say, on the Orange/Webraska system, where the maps are downloaded over the air, he says.
Bassi adds that T-Mobile ‘s flat-rate Web ‘n ‘ Walk data offer means that, no matter how many map updates or real-time traffic information is downloaded, there will be no surprises when the bill comes in.
There ‘s no doubt that SatNav has widened the market for premium handsets in the dealer channel, but the key thing for resellers to remember is that having SatNav on a mobile also encourages buyers to use extra non-voice services, he says.

3G, GPRS and e-mail
Alongside SatNav, T-Mobile is looking to its sales channel to encourage buyers to use mobile e-mail services, where 3G handsets and 3G speeds come into their own.
The only slight downside with 3G  both from T-Mobile ‘s and the dealer ‘s perspective  is the fact that there are extra costs involved in configuring 3G services, according to Bassi.
For this reason, it ‘s important to offer some lower-specification mobiles, which also offer SatNav option, but which use GPRS facilities. There are a large number of users that want SatNav, but also want a mobile that ‘s easy to use, and GPRS fits that bill, he says.
One of the e-mail areas that T-Mobile plans to promote in the near future is push e-mail.
We ‘re finding that having SatNav functionality, as well as push e-mail facilities, on a single device is starting to become attractive to the consumer user, says Bassi.
He predicts that, within the next year-or-so, SatNav and mobile e-mail will become standard features on mid- and high-end mobile phones.
Consumers will expect these features as standard on their mobiles, just as they expect text and picture messaging support. It ‘s going to happen, he says.
One area of SatNav that Bassi expects to see in the near future is the increasing use of mobile data  both GPRS and 3G  to download mapping updates, real time traffic data and speed camera location information.
Battery power is likely to be an issue when this happens, but most SatNav-enabled mobile phones and their kits also come with a car charger as standard, so, in the car at least, battery power as such will be a major problem, he argues.
For pedestrians and vehicle drivers using their mobile on battery power, Bassi adds that dealers can explain to users that the SatNav function on most handsets can be set in a power conservation mode, which all adds to the mobile ‘s lifespan between charges.
The distributors ‘ perspective
Although the networks are keen to promote SatNav as an extra profit vehicle to the reseller channel, what about the reseller channel itself? How are sales really progressing?
Unique Distribution head of accessories John Bysh reckons that sales of quality SatNav systems, such as the Nokia solutions, are definitely on the up.
However, the lower budget systems, can cause problems with facilities such as Bluetooth pairing, he says. For this reason, Unique is steering clear of stocking these items, at least for the time being.
We have looked at a number of third-party SatNav add-ons for mobiles, but there are problems with Bluetooth pairing. (Unique sales manager) James Cooper was in Spain earlier in the year and he had problems pairing some of the third-party systems we ‘ve seen, so we ‘re not stocking these items just yet, says Bysh.
The Nokia SatNav add-ons are far less problematical on the Bluetooth pairing front.
The Nokia LD-3 is a good seller as it ‘s a lot better than earlier models, and were also finding that more and more handsets are well suited to the Route 66 SatNav mapping software, he says.
One of the interesting trends that Unique has noticed about its dealers is that customers are tending to go for SatNav as an optional extra after they have bought their handset, rather than going for a bundling deal at the time of purchase of the contract and handset.
Bysh explains that Unique is also anxious to avoid making too many different SatNav systems available to dealers, so as to avoid a VHS-versus-Betamax-type competition situation.
Our dealers want a product they can sell and support. They want a system that works, and works well, says Bysh, adding that battery power on SatNav mobiles is not as much of a problem as it used to be.
The new Nokia CK-20 car kit illustrates this, as it has two car charger sockets that can power, for example, the GPS SatNav add-on, as well as the mobile itself, all going into a single cigarette car charger socket, he explains.
The only issue that customers have with SatNav is the cost of the accessory when they buy the system as an add-on, rather than as part of a package deal, according to Bysh..
He explains: The problem has been, and probably always will be, that if the customer gets a high-end mobile for free, they question why they have to pay so much for the SatNav add-on.

GPS  what ‘s that?
GPS stands for Global Positioning System, a series of geo-stationery satellites that ring the Earth and provide highly-accurate satellite navigation facilities for the US military and other friendly armies around the world.
A less accurate GPS system is also available free of charge to civilian users in most countries of the world, allowing suitably equipped devices  now including mobile phones  to locate themselves almost anywhere on the Earth ‘s surface to within a few metres.
Unlike cellular, SatNav systems do not work indoors, or anywhere that the mobile does not have clear line-of-sight access to the sky.
For GPS to work, the mobile must be able to see two or three available satellites. On a motorway, a SatNav system can ܘsee ‘ around eight. In towns and cities, with tall buildings in the way, even the best SatNav system can lose track of the GPS network for a few seconds.
A new generation of smartphones that includes the GPS function as part of its on-board electronics is on the way. T-Mobile ‘s MDA Compact III, launched this month, is the first such device with this option.
Most mobile users must install a GPS receiver unit  typically the same size as a packet of cigarettes  in their car, and ܘpair ‘ the receiver to the smartphone using Bluetooth.

The £150 Orange SatNav option
As widely rumoured in the sales channel during October, Orange countered T-Mobile ‘s Co-Pilot offering earlier this month with its own mobile-enhanced SatNav offering.
Selling through all Orange channels, the £150 GPS navigation bundle is available as an accessory package for several Nokia, Orange and Sony-Ericsson handsets, as well as the BlackBerry, and has its software saved on to the handset.
Unlike the T-Mobile Co-Pilot offering and most SatNav systems seen to date, the mapping data is not stored on a card or the mobile, but is downloaded across the mobile Internet using the Webraska software.
Webraska sales director Nigel Brooke reckons that, despite what some carriers are claiming, downloading the mapping data from the network is not an expensive option.
Our research has shown that a typical person driving 10,000 miles and using the Orange/Webraska SatNav option, will require data downloads of between 12 and 15 megabytes over the year. On a good tariff, thats around £15 a year ‘s worth of mobile data, he says.
Most maps, says Brooke, are updated every three months or so, and users can also opt for real-time traffic and speed camera information for an annual subscription of £27.59 (plus VAT).
Maps and their updates can also be downloaded across Orange ‘s GPRS, EDGE and 3G networks, as well as via Wi-Fi, to save on data transfer charges.
So why did Orange go for downloadable maps, when data storage cards for mobiles are priced so low?
According to Brooke, the reason is that mobile users with SatNav also want to store music and e-mail on their handset ‘s storage card.
He says: If the card is stuffed with mapping data, they can ‘t store this other data, which our research suggests they want to.
HTC claims it will provide GPS as standard on most premium handsets within two years and Nokia expects to launch its own GPS-enabled mobile early next year.