Why haven't GPS units dropped as much as other electronics?

December 14, 2006 5:47 PM

Most electronics drop dramatically in price. GPS units do not seem to have dropped as dramatically. Is there a reason, or multiple reasons for this? Are GPS receivers fundamentally harder to make for some reason? Is there a licence fee? Have the volumes been too low? Does getting new information for the maps, for car guidance systems, keep the price up?
posted by sien to technology (19 answers total)

They're already cheap because they're created using technologies which have already benefited from the drop in price that you're talking about.
posted by Steven C. Den Beste at 5:51 PM on December 14, 2006

Actually it's not that they don't drop in price, it's that they keep adding features to the base model and charging the same amount.

By way of example, 5 years ago I got a Brunton GPS unit. It chews through batteries, takes upwards of 3 minutes to acquire a link, has a limited LCD display that shows the coordinates and if you want to use it to navigate, it gives you an arrow which points to your next waypoint. It cost me $200.

Last week, I got a $200 Garmin that is a quarter the size, has a full color map, picks up the satellites in about 20 seconds, holds hundreds of waypoints, and has been running on the same AA batteries since I got it. Also, it's got games, a calender, a calculator, and built in support for geocaching.

If you were to look around for older, used hardware, you would probably find prices that were much more discounted.
posted by quin at 5:58 PM on December 14, 2006

I think it's more a matter of one manufacturer (Garmin) dominating the field to such an extent that it doesn't feel it has to drop prices.

They have a new competitor, TomTom, which apparently does pretty good stuff, and they're consistently priced under the Garmin equivalents. I think you may see significant price declines over the next year or two as the competition heats up.
posted by Malor at 5:59 PM on December 14, 2006

[And don't get me started on Garmin's map selling practices: I have to buy the GPS, then buy the cd, then buy the individual maps off the cd? Fuckers.]
posted by quin at 6:00 PM on December 14, 2006

Economics, kiddo. The people that are willing to buy GPS devices are willing to spend more dough on them. Not everyone groks what a GPS can do and therefore don't want them. Everyone understands a telephone and everyone wants one. So GPS units don't get cheaper until there's a bigger market for them, but the cost of a cell phone falls through the floor.
posted by frogan at 6:07 PM on December 14, 2006

Garmin have always had healthy competition: mainly Lowrance and Magellan. But the competition seems inable to make their devices useable. (I own 4 garmin units, 2 magellans and 3 USB GPS hockey puck units - I write GPS software in my spare time).

You've been able to buy a "GPS on a chip" for a few years now and the prices are as low as any other commodity electronic components. So in theory you can buy GPSes for a few dollars (and you can - for example the USB GPS puck that comes with MS Streets and Trips). However the handheld and in-car units are becoming more and more complex and adding features by the boatload.

Taking a typical mid to high-end handheld GPS (say a Garmin eTrex Legend/Vista cX) you have colour screen, auto-routing, upgradable memory, possibly electronic compass/altimeter and so on. In-car units have bigger colour screens, voice synth, built-in micro hard drives and blue tooth.

These features cost money.

But basically at the end of the day it will always boil down to what price the market will bare.

Quin: Not sure what maps you're buying but the ones i buy from Garmin (City and Europe navigator) are fully unlocked with the purchases of the disk.
posted by schwa at 6:10 PM on December 14, 2006 [2 favorites]

Car GPS units are expensive because people are willing to spend a lot for car accessories. Especially when they're still cheap compared to the manufacturer's $1500 GPS solution. Then, since the same company also sells the standalone units, they keep those prices relatively high, since they don't want to cannibalize their car products with their higher margins.

OTOH, this does leave the door open for someone like TomTom to come in at a sub $300 price point and force the entrenched manufacturers to drop prices.
posted by smackfu at 6:18 PM on December 14, 2006

The time I see electronics take a significant price drop is when some "no name Chinese version" shows up on the market. There are a few other companies besides Garmin that make GPS units, and I have noticed a price drop. The base modem Garmin eTrex usually hovers around $85-$100 but Fry's sometimes has them on sale foru ~$70.
posted by drstein at 6:44 PM on December 14, 2006

[derail]

schwa, Is that the case? I haven't actually bought the disk yet, but my research suggested otherwise. Were I to get the City Navigator disk, can I pull maps from several different cities, or do I have to pay for an unlock code for each one? The unit itself (Legend C) is awesome and I was going to get really disappointed if I was going to have to shell out $15 or so each to get the four cities I regularly travel in.

[/derail: sorry carry on]
posted by quin at 7:00 PM on December 14, 2006

I work in marketing for a large retailer that commands a large chunk of the GPS market in Canada. GPS/navigation units have extremely high return rates - people don't understand how to use them, and end up bringing them back to the store. (Something like 50% get returned; apparently that's a market-wide rate, not just my employers.) So i'd have to imagine that that would keep the price elevated.
posted by Kololo at 7:26 PM on December 14, 2006

A lot of cell phones now have GPS receivers in them, although by default, you don't have access to the position information. But Trimble sells software that allows you to use the feature on a wide variety of recent phone models.

I have not used this software nor any GPS enabled phone. I suspect the GPS quality is not up to what you would expect from a dedicated unit. But on the other hand, if you get the right phone, your next GPS unit might be free!
posted by IvyMike at 7:32 PM on December 14, 2006

In fact, GPS receivers are up there with portable DVD players and USB flash drives in terms of greatest percentage of price reduction over the past few years.

Also, the new SiRF Star III chipset is hands-down better than the old tech, and of course more expensive.
posted by djb at 7:44 PM on December 14, 2006

A lot of cell phones now have GPS receivers in them, although by default, you don't have access to the position information.

Slightly OT, but I don't think any of them have real GPS, they just triangulate from the signal strength of nearby cell towers.
posted by cillit bang at 7:51 PM on December 14, 2006

There's no license fee to use the service, the signals are free just like WWVB that sets the "atomic" radio-synchronized clocks you see all over the place.

However, building a receiver/decoder chip that makes useful data out of the signals is pretty difficult. The chips are down to a few bucks now, but that's still expensive compared to things like optical mouse chipsets, which can be had for pennies.

A position-only GPS unit, like the USB pucks that you use with mapping software, should be very cheap, on the order of ten bucks now. They're down to 50 pretty reliably, but that's still a lot more expensive than I'd expect, given how everything else has fallen. Sien, your question is sure a valid one. I guess every bozo owns a handful of mice, whereas the market penetration for GPS units is a lot lower. Maybe it really is just volume.

Mapping software, whether standalone laptop style, or built into a fancy-schmancy GPS receiver, costs a lot to maintain because it takes effort to keep the maps up to date. In the US, the base map data comes from the census bureau, but it's rudimentary at best. Each company that does maps has their own data-gathering process to flesh out the TIGER data with better info, and they're constantly working to keep up with construction.

The GPS receivers built into cellphones fall into two categories: Standalone, real GPS chips, and "tower-assisted" types. The latter is typically only active when you dial 911, and only works when you're on the network. The former is a whole functional receiver that happens to share a chassis with the phone, and works even if you're hundreds of miles out of coverage. iDEN phones (nextel) use real GPS chips, most everyone else has assisted GPS.

In all cases, cellular companies are trying to "monetize" the GPS capabilities of their phones, so the days of being able to plug your phone into your laptop and use it with Street Atlas may be over. The same thing happened with Bluetooth, providers realized it was cutting into their picturemail profits, so they locked it up. A subscriber revolt is in order.

Kololo, I never heard the thing about high return rates before but I guess it makes sense. A lot of people are utterly freakin' clueless about GPS, having been raised in a movie theater or something. Maybe they're really the reason prices stay high? The concept boils my blood.
posted by Myself at 7:54 PM on December 14, 2006

Thanks for the comments folks.

djb. Your link on price drops does not have numbers, just an assertion, please correct me if I'm wrong.

From my own experience, basic hiking GPS units were $US100 in 1998. They are still about that now. Car units have dropped but not like, say, USB keys, flash storage, Hard drives, CPUs, Graphics cards and much other tech.

There is an upcoming phone, the Nokia N95 will have a GPS built in, which I thought was a first for a phone.

It just seems surprising that there is a talking, flash drive based GPS car unit for say, $US150-200 yet.
posted by sien at 8:25 PM on December 14, 2006

Cillit Bang, it isn't possible to do triangulation with CDMA (i.e. Verizon, Sprint, and Cingular's UMTS service). You can theoretically do phase-delay calculations on the long code, but what that gets you is the round-trip RF pathlength, which isn't necessarily twice the as-the-crow-flies radius. And often (maybe half the time) a phone is only within range of one sector of one cell, which means that only one fix is possible, which isn't enough to locate it.

Most new cell phones do indeed have real GPS receivers built in because it's the only way to satisfy the FCC rules regarding 911 support.
posted by Steven C. Den Beste at 8:33 PM on December 14, 2006

I can vouch for the SiRF Star III being worth the money. I have a Garmin Edge 305 and it's about 100X faster and more accurate than my old eMap, and even better than the unit in my 1 year old car. Sips on batteries in comparison.
posted by kcm at 11:18 PM on December 14, 2006

One obvious reason is that GPSs have started to get bundled with increasingly large inbuilt maps. GPS technology does not require a licence fee but maps certainly do.

In the UK the price of a feature identical GPS unit has fallen by about 300% over the past 3 years - quite a remarkable decrease. These units now routinely include maps of the whole of the UK or of Europe. However for the car driver this is only really acting as a equivalent for a national road atlas costing a few pounds.

For hikers, sailors, surveyors, the military and emergency services - the original cadre of GPS units - detailed maps are a lot more important and expensive. To purchase paper maps sufficiently detailed for me to be able to hike anywhere in the UK I would need to spend several thousand pounds for example. I would suggest that one reason GPS units are staying expensive at the geekier end of the market is that they are bundling more of these detailed maps and hence picking up the licence fees.
posted by rongorongo at 3:29 AM on December 15, 2006

Damn. I meant to say that IN CAR gps systems are falling in price fast - but others are not.
posted by rongorongo at 3:30 AM on December 15, 2006