Carriers – the giant in the room

Paid vs. free: which business model prevails?

Carriers play a major role in fostering the growth of navigation applications, according to representatives from several vendors and analysts. What is less certain is whether that role is sustainable.

Sal Dhanani, TeleNav's co-founder and executive director of marketing, said that his company's relationships with AT&T Mobility and Sprint Nextel have allowed TeleNav to bring its products to a mainstream consumer audience. (TeleNav is also support by T-Mobile USA on some handsets). Dhanani said that because carriers have the ability work with handset OEMs to improve GPS, their support is critical. "They've played a very important role," he said. "We hope and we expect that they (carriers) will continue to play that role to grow the market."

Dale Beasley, Verizon Wireless' LBS and VZ Navigator product manager, believes carriers will always have a major say in what gets put on their phones. Beasley emphasized that there may be more solutions that become available for consumers besides the branded, carrier-sponsored services, as carriers become more open to outside applications. However, he said he believes carriers will always tend to favor their own products because that's where they get their revenues.

"The biggest competition we have for VZ Navigator is lack of knowledge of VZ Navigator," he said. Once people know about the application, and get to use it, he said, they are willing to pay for it. VZ Navigator costs $10 per month for Verizon customers who can access the service.

However, maintaining the traditional business model may not be that simple. Steve Andler, vice president of marketing for Networks In Motion (the company whose software powers VZ Navigator), said that carriers need to be open to doing whatever it takes to provide the best navigation solution to customers.

Frank Dickson, an analyst at In-Stat, said he sees the role of carriers declining because of the proliferation of free navigation applications. However, he noted that many of these ventures "require a lot of effort."

"I would contend there's a whole host of mapping applications or location applications that are good for the masses," Dickson said. "The navigation services are more applicable to the fraction of population. The nice thing about the wireless market is, you don't need a huge percentage of users. You only need fraction of percentage of users because the numbers are so big."


Paid vs. free: which business model prevails?