Why stand-alone GPS devices are doomed

I'm not yet saying the nail is in the coffin for companies like TomTom, Garmin and Magellan, but they better start figuring out ways to lower the costs of stand-alone GPS devices. The navigation application on a cell phone or smart phone will blow them out of the water.

Research firm In-Stat thinks so. "Mobile phone operators now have the ability to market a downloadable navigation application that is just as good as, if not better, than personal navigation devices," In-Stat says in a new report. Handset-based mapping and navigation apps could "cause a major change" in the navigation market, the firm adds.

Why?

1) People already own their cell phone, and many have GPS capabilities built in because of mandates to support E-911 services. If they want to try a navigation system, they don't have to buy an additional device.

2) Customers who don't want to use their navigation application all the time can pay for just a 24-hour version, giving them the directions they need for one-time trips. Unless we drive to unknown locations for a living, most of us know how to get where we're going. It's the occasional unknown destination that makes us sometimes yearn for driving directions.

In-Stat predicts that by 2012 there will be 42 million mapping and navigation mobile phone subscribers, with cellular operators who have CDMA- and iDEN-based networks with an advantage over other operators (because of the A-GPS technology they already have).

No wonder firms like Mio Technology and others are looking to add additional functionality to their stand-alone devices. Features like MP3 players, video players and PDA-like organizers could extend the life of these devices for a while. In addition, functionality such as speech recognition and real-time traffic alerts are also being explored.

But if I was a betting man, I'm more comfortable with the position of the carriers and companies like TeleNav, which run their applications off of a handset, over some of these stand-alone manufacturers.