How Does a Niche App Change the Game?

So, now Android 2.0 has the new Google navigation support. Interesting. Looks pretty cool. It will likely take a chunk out of Garmin and TomTom’s market. But, I simply don’t see this as being the “game changer” that the industry press is making it out to be. It will be useful to a small segment of the population, and I can see it gaining a small segment of people who are looking for both a new smart phone and a navigation device. But “game changer”: I don’t think so.

First, it’s only useful to a small segment of the population. A lot of the people who buy phones either don’t own cars, don’t drive very far, or aren’t typically in need of navigational assistance. Of half-dozen or so people I know that have nav systems (either built-in or standalone, admittedly a small sample population), only 1 uses it with any regularity, and that’s my parents when they take their trip down south. For everyone else, its a toy they use once or twice a year.

Second, Google is unlikely to leave this as unique to Android for very long. Supposedly the iPhone version is in the works. I would expect it for both iPhone and Blackberry in short order: Google knows that its brand depends on ubiquity. You can’t be ubiquitous when you restrict yourself to the (currently) smallest player in the game.

Third, to get this on the Droid, you need to not only buy the phone (albeit at a subsidized price), but you also have to buy a voice and data contract to go with it. For people looking for a navigation system and nothing else, that will be a pretty steep price to pay.

Adding Google navigation is unlikely to add very many new customers that weren’t already in the market for a smart phone anyways. Sure, its a nice thing to have, but mainstream smartphone buyers are looking for a) a phone, b) e-mail, c) sometimes social networking (Twitter, FaceBook, blogging), and d) web browsing. Other applications like word processing, spreadsheets, games, navigation software, etc are sure nice to have, and do draw some customers, but are not the most compelling reason people buy these things. If they were, then the iPhone should have sold in far, far greater numbers, since it had the first real app store, and the first one with any application inventory of any size. The app store has helped, but the iPhone does not dominate the market. In North America, RIM is still the big guy on the block with 52% of the market, and second globally with 21%. Symbian is still the biggest globally with just over 50%. The iPhone is second in North America (with 23%) and 3rd globally (16%)  according to an article in the International Business Times, quoting a Canalys report. Android will change that landscape, making it a 3-horse race in N. America (Android, iPhone, Blackberry) and a 4-horse race elsewhere (add Symbian to the mix). But there won’t be enough in Android to make it so much more compelling compared to the iPhone and Blackberry. It will be competitive, and that’s not a bad thing.

From what I’ve seen, the Motorola Droid is a very nice piece of technology. Android itself is a worthy competitor to the iPhone and Blackberry, when it is placed on decent hardware. By creating a good quality product, Motorola will make sure that Apple and RIM won’t sit still and get complacent. I’m glad the Droid is coming. Even if they come to Canada, I am unlikely to get one, since I recently got my iPhone and am quite happy with it. But others will buy it, and there should be enough sold to move Android into contention for bigger marketshare.