TomTom Needs Direction In The Navigation Category

The unofficial Apple weblog reported recently that GPS software and hardware maker TomTom has cut prices on its iPhone navigation application. The widget assists drivers with turn-by-turn directional mapping -- as long as you don't live in Canada.

Engadget revealed that the app now costs $49, well down from the original price of $99. Black Friday saw TomTom doorbuster models selling for $59, while refurbished high-end GPS devices were below $50 on eBay.

These price cuts are evidence that TomTom is unable to continue its premium pricing for either stand-alone or iPhone software products for much longer. Competition with Google's similar, and free, navigation application proved too much for the brand and its stock prices dropped steeply in the days after the announcement. Consumers can expect to see more discounts on TomTom's Apple iPhone operation.

There is little brand loyalty to GPS devices as the functions they serve are largely interchangeable. The app's features are not varied enough to allow for differentiation among brands. Cellphone companies (including Apple, Google, Palm, and Microsoft) are putting every bell and whistle into new devices from MP3 players and point-and-shoot digital cameras to GPS units. The quality of cameras inside smart phones has vastly improved from years past and many of the new models provide 5 megapixel resolution or above.

This puts significant pressure on TomTom to get with the program and break away from the pack, but what can the company provide that the others cannot?