The enormous market expansion and related price war in the consumer navigation market is no longer new. What has changed is that the attempts at production segmentation and the additional revenue streams for the most competitive portable segment are increasingly arriving in the form of network-connected services. Over the past few years, higher-end models have offered such features as test-to-speech and real-time traffic information. But, as even these features are incorporated into the most inexpensive products by generic device manufacturers, connectivity is becoming the last bastion of feature differentiation. “By next year, simple one-way traffic information over satellite radio will be found even on the lowest-price portable navigation devices sold for under $300,” says ABI Research principal analyst Dan Benjamin. “The big players in the portable navigation market are going to see increased competition, not just from me-too products offered by the classic consumer electronic vendors, but also from thin-client specialized vendors such as TeleNav and Wayfinder. The thin-client players will be able to advertise perpetually updated maps and POI, and lower up-front costs due to reduced storage and processing needs. We expect on-board portable navigation vendors to follow TomTom and offer more connectivity, but with a focus on premium traffic information and location database updates.” Benjamin also believes that some of the newest market entrants, big names like Philips and Sony, could be in for a rude market awakening. “Established navigation names like Magellan have been forced to clear out their products through discounters and Navman is publicly up for sale. If they come in to compete on brand instead of price or features, I would not be terribly optimistic. This market is comparable to the audio player market before the iPod. Many had products, but it was the service component in iTunes that separated Apple’s offering from the pack.”