Re: Product Activation (Garmin)
From: Peter (prathman_at_comcast.net)
Date: 01/12/05
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Date: Wed, 12 Jan 2005 01:42:35 -0800
GSV Three Minds in a Can wrote:
> Bitstring <34jlp3F4cmn9lU1@individual.net>, from the wonderful person
> Graham W <zebedee@alphalink.commercial.au> said
>
>> GSV Three Minds in a Can wrote:
>>
>>> Which means if they don't want to sell me a topo map of NZ, I can
>>> jolly well do without??
>>
>>
>> Yes.
>>
>> NZ has a population of about 4 million in a nation the size of Japan.
>>
>> If you were making expensive electronic maps for sale to the public,
>> would you invest resources doing New Zealand first?
>>
>> Or would you do the US, where the data is free and the population is
>> 70 times that of New Zealand?
>>
>> Or would you do New Zealand first?
>>
>>> I don't think that's much of a business model for long
>>> term customer satisfaction, unless you define customers as people who
>>> live in the USA, or want routeable road maps only.
>>
>>
>> You serve the most customers for the least effort first, and work
>> through the available markets towards the groups requiring the least
>> market for the most effort.
>
>
> Yes, that's all obvious .. so if NZ is a negligable market, why not use
> open source maps; you can sell hardware to NZ and let someone else
> provide the software (if they choose to, which they will).
And they do. There are at least two sources of NZ maps for Garmin
receivers - neither is provided by Garmin. I don't believe either
one shows elevation contours, but that's hardly Garmin's fault.
There are topographic maps (i.e. with contours) of other countries
that are also provided by independent map suppliers of Garmin-
compatible products.
So what's the problem?
> Garmin (and
> others) apparently want the best of both worlds - 'rip off' software
> pricing (someone already said 'ah, but all the money's in the map
> software', implying that yeah, it really is overpriced), and satisfied
> customers. Not possible.
This is a completely separate accusation - that Garmin charges too
high a price for the maps they do provide. Presumably the remedy
would be for those who feel the price provides for excessive profits
to develop their own competing products; sell them for less
and only make high rather than excessive profit. Since there are
lots of companies charging for Garmin-compatible maps in assorted
countries, there doesn't seem to be any insurmountable barrier to
entering the market. Why are none of the whiners jumping to take
advantage of this great opportunity?
>
> The razor/razorblade and printer/ink model works because you sell ink or
> blades lots of times, for a relatively small part of the original
> hardware cost. This does not p1$$ the punters off.
>
> When you sell a GPS for $100 (which is what the price is down to .. or
> will be soon) and then want $200 for the software, you =will= p1$$ the
> punters off. They can smell 'rip off' 100 miles away.
>
> Now if you'd sell them the software for $50, and provide an annual
> update service for say $25 a year, you'd have a saner business model and
> happier customers.
>
Sounds good if you are producing the software in-house at a cost that
allows you to keep your developers happy and still make a profit.
But if you are relying on purchasing the data from an outside firm
and the best deal you can negotiate involves license fees of $60 for
each new sale and $30 per upgrade then it no longer looks like a
sane business model, but rather as a going out of business strategy.
I have no idea how much Garmin and Magellan have to pay NavTeq.
But I do note that NavTeq sells the same map data to other
companies that make car navigation systems. Comparing Garmin's
prices to that charged by those companies for each map upgrade makes
Garmin look like a great bargain.
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