Do You Know Where You're Going?

By Marie D'Amico, 

Locators Are a Golden, Unmined Market

It’s a mundane but universal truth. We've all got somewhere to go. Developing products which address everyday needs, such as travel, may not have the panache of creating titles for the Spielberg-Katzenberg-Geffen DreamWorks Corporation but, as Intuit discovered, it has the prospect of earning $1.1 billion from the Microsoft Corporation . If you’re debating where to place your programming prowess, ponder all those unreadable, unfoldable maps in everyone’s cars and think, there must be a digitally better way.

It’s a Trifle Crowded in Software

Software solutions, like gas stations of yore, can now politely tell you how the heck to get from here to there. These titles generally require you to input your starting point and destination; the products then output nifty facts such as the quickest or shortest route, mileage, and travel time. Some products function merely as maps, whereas others act as travel agents, providing helpful hints about restaurants, hotels, and points-of-interest along your way. The market for these travel titles has become congested in merely three years. In ’91, DeLorme Mapping, a 19 year-old print atlas company based in L.L. Bean’s hometown of Freeport, Maine, released Street Atlas USA , a CD-ROM for Windows-compatible computers, made Macintosh-compatible in ’93. It features over 12 million street maps of the entire United States for the piddling price of $79.95 and has sold hundreds of thousands of copies. Since I purchased this product, I’ve gotten lost only when I’ve replaced its digitally accurate advice with that of an ill-informed human.

DeLorme already has more than six rivals although most travel titles only contain maps of a few major metropolitan areas; you must purchase maps of additional cities. DeLorme exploits its own cartographic content whereas competitors general employ maps from a company called ETAK ; since ETAK’s maps aren’t free, prices aren’t paltry. Automap, Inc. released a CD-ROM version of Automap Road Atlas for DOS and Windows in March ’94; it includes maps of New York, San Francisco, Chicago, D.C., and a city of your choice at a suggested retail price (SRP) of $79.95 and a street price of $50; additional maps are $30. Axxis Software, Inc. released Taxi , formerly called CityGuide , in November ’93 for Windows and in October ’94 for Macintoshes; at an SRP of $59.95 the user gets a CD-ROM with five cities; five additional cities are $49.95; 20 cities are $159.95. In October ’94, Axxis inked a delightful deal with IBM; all IBM ThinkPads now come preloaded with a limited, two-city version of Taxi. Compton NewMedia uses their best-selling travel tip books to publish the CD-ROMs, Let's Go: The Budget Guide to Europe , for Macintosh and Windows at an SRP of $49.95, and AAA Trip Planner for Windows, at an SRP of $59.95. Deep River/Cambrix Publishing produces Windows-based CD-ROMs, Everywhere USA Travel Guide at an SRP of $59.95, and Adventures , at an SRP of $49.95. And Road Scholar, Inc. released City Streets for Windows in ’92, four cities are $99.95, additional U.S. cities are $29.95 and European cities are $59.95.

While the software market appears claustrophobically crowded, you can commandeer market share if you address a different platform, region, or segment. For example, less than half the travel titles are Macintosh-compatible; the rest remain exclusively DOS or Windows-based. Only City Streets provides non-North American maps, which leaves loads of countries to be mapped. And, while people who are pilots, boaters, or hikers are only three of the types who rely upon locators for professional and personal uses, only Automap has addressed any specific segments. Their vertical market Road Atlas add-ons, Destination Golf , Destination Ski , and Destination Campgrounds , address each titled topic for only $19.95. DeLorme’s recent non-map foray, Map’n’Go , a $59 geographical-historical-cultural program, richly rewarded its producer by selling 100K units in merely three months. Finally, developing travel titles may be a way to cash in your founder’s stock and avoid the agony of an initial public offering. In July ’93, Axxis was purchased by News Electronic Data, Inc., a unit of Rupert Murdoch ’s empire, and in January ’95, Automap was purchased by Microsoft .

It’s Almost Empty in Hardware

It may be cramped over in software, but hardly anyone is hanging out in hardware, even though it’s free. Hardware locator solutions generally are based upon global positioning systems ( GPS ). GPS is a constellation of 24 satellites, deployed by the Department of Defense ( DoD ), that orbit the earth at an altitude of 20,200 kilometers. They are monitored twice daily by the DoD and any necessary corrections in altitude, position, or speed are made and they are designed robustly to be impervious to jamming and interference. They transmit, free of charge, 24 hours a day, 7 days a week, precisely timed signals. GPS receivers on the ground calculate their latitude and longitude positions, within 100 meters (328 feet), by making distance measurements from three or four satellites, analyzing the time it takes for a signal to travel from a satellite to a GPS receiver. GPS receivers for military applications have been developed and sold for a decade by companies such as Trimble Navigation , the world’s largest GPS manufacturer. With world peace hopefully on the horizon, these companies now are retrofitting GPS technology for commercial applications. With an estimated ’95 market value for GPS devices of $956 million excluding car navigation and $1.3 billion including car navigation, peace can pay.

GPS devices are currently being principally used in vertical applications by commercial businesses and by fire, police, and ambulance dispatch systems to operate their fleet and track vehicles and routes with pinpoint precision. These devices yield an astronomical return on investment - Trimble reported a gross profit margin of 54.7% in ’93 on its 85 different vertical GPS products. As the price of GPS technology decreases, and it will, you could go horizontal and still get a piece of this pie. Trimble recently released devices for the horizontal market; Scout and ScoutMaster are handheld consumer GPS devices for about $800 and both Trimble and Road Scholar have released GPS PCMCIA Type 2 cards for around $400. Dataquest estimates the number of PCs with such PCMCIA slots will reach 15 million by ’97; room for plenty of players. Or, you could join the small number of developers designing software solutions for these GPS PCMCIA cards. Road Scholar’s City Streets is compatible with its own Marco Polo GPS PCMCIA card; DeLorme’s MapExpert or GPS MapKit SV , at $295 or $495, respectively, can be linked with GPS PCMCIA cards, as can Personal Travel Technologies’ P-NAV product at $149.95. And, proving No. 2 tries harder, Avis , but not Hertz , has equipped a total of 295 rental cars in Los Angeles, San Francisco, and South Florida with Rockwell International’s GPS receivers and software by Zexel U.S.A. Company for a mere $5 extra per day.

Another potential moneymaking application of GPS receivers is enhanced 911 service (E911). E911 transmits automatic location information (ALI) and automatic number identification (ANI) to public-safety answering points (PSAP). Wireless telephones and private branch exchange equipment (PBX) can’t provide ALI or ANI since they have no fixed location. The Federal Communication Commission ( FCC ) issued a proposed notice of rulemaking in October ’94 in which the FCC stated wireless telephones and PBX must provide, in five years, ALI and ANI within a radius of 125 meters. The FCC alleges the rule is necessary because emergency personnel cannot rely upon "distressed callers" to describe their location or number. Is this the real rationale or is the FCC aiding law enforcement agencies’ desire to be able to locate us anywhere? Unfortunately, the latter rings Big Brotherian-true to me. There are currently 20 million wireless telephones in the United States; worldwide the number has increased from zero to 40 million in just 12 years and is expected to reach 160-200 million in 20 countries by the year 2000. That’s a non-Gates market definitely worth addressing.

Smith Advanced Technology, Inc., of Huntsville, Alabama, agrees. They’re developing a system which equips wireless telephones with a combination GPS engine, microcontroller, software, and interfacing electronics to produce ALI and ANI accurate to less than 100 meters. They are claiming an added telephone cost of less than $100 and a cost of $300-$500 for a retrofit unit. They have demonstrated successfully the system to the New Jersey State Police . NAVSYS Corporation in Colorado Springs, Colorado is developing a similar system and is testing it with the Federal Highway Administration. Their system, called TIDGET , will be sold by GEC Plessey on an original equipment manufacturer (OEM) basis with a proposed added telephone cost of less than $100. Normally, GPS receivers track and process the signals. TIDGET broadcasts the GPS signals back to the customer’s PSAP facility through a communications link and offloads the processing of these signals to such site. This offloading allows the wireless telephone to contain a cheap and stripped down GPS receiver.

Learn to Crawl and Then to Walk

The software and hardware locator industry is in its infancy. Software solutions have been marketed for merely a few years, and although some producers have racked up sales of 500K per title, many horizontal and vertical markets remain open. Similarly, before ’94, hardware solutions subsisted solely on vertical market applications because the cost of GPS receivers had been in the multi-thousands, a tad high for the garden-variety consumer. With costs decreasing and technology improving, when this industry begins to walk, we’ll all have to think of another excuse for being late besides, "I got lost."

Questions? Send me email.

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© 2006 Digital Media