Satnav is a business built inside a tariff

You can buy a decent satellite navigation unit for under two hundred dollars now, which is roughly a third of what the same thing cost two years ago. Garmin and TomTom are selling them faster than they can count, and the category is being written up as a success story.

It is a success story. It is also a category that exists inside a gap, and the gap is closing from both sides.

What a standalone navigator actually sells you is not the receiver. Positioning chips are cheap and getting cheaper and there is no meaningful difference between one manufacturer’s and another’s. What you are paying for is the map, stored on the device, along with the software that turns a position into an instruction.

A stored map has a property nobody likes discussing at the point of sale, which is that it begins going wrong immediately. Roads open. One-way systems get reversed. The retail park you are being sent to closed last spring. Nothing about the device tells you which parts of its map are still true, so the failure mode is confident and wrong, which is worse than uncertain.

The manufacturers sell updates, and customers resent paying, because people have learned to think of anything delivered as a file as something that should arrive free like a patch. That resentment is not going to soften.

Now consider the alternative that already exists in a limited way. A phone with a positioning chip and a data connection does not store a map at all. It fetches the part it needs, which means the map is never stale, and it can search for a business by name rather than by an address you have to know in advance, and it can be told about a traffic jam that started ten minutes ago.

Every one of those is a capability the dedicated device cannot have, and none of them is a matter of engineering effort. They follow from being connected.

So why is anyone buying the dedicated one? Because of what I wrote about in May. The data is priced so that no sensible person leaves a connection running for an hour’s drive, and if you are abroad the roaming charge for doing so would exceed the cost of the navigator. A two hundred dollar box with an old map is the rational purchase when the connected version bills by the megabyte.

Which means Garmin and TomTom are, at the moment, in the business of selling around a tariff.

That is a real business and it will be good for a few more years. It is not a durable one, because the thing protecting it is a pricing decision made by companies with no interest in protecting it, and pricing decisions change faster than product categories can adapt to them.