Sunday, July 5, 2009

Pimped up Tom-toms...Netbooks+GPS: where is the value?

There is something funny going on in consumer electronics and personal computing nowadays. There is the tendency to combine different functionality into one all encompassing device. Management calls it convergence. Sales and marketing call it up-selling. The product guys call it how-to-keep-your-job-important. Consumers see it as a peculiar phenomena where devices become pricier even though they should be getting cheaper.

Here is a good example :

Smart phone = phone + camera + GPS + DVB-H TV receiver + memory stick + music player + ...

OK so I see some value in this smart phone convergence algebra. All the above services may be useful to a user and its great to carry them all in your pocket.

But it struck me as odd that Dell is planning to up-sell its Mini notebooks by charging users for extra GPS hardware. Apart from robotic aficionados who would want such GPS service on a netbook? The significant time it will take to power on a netbook and fire up the GPS would probably mean you've overshot a couple of highway exits before the GPS locks on and tells you where you are. And that will be after you've somehow placed the netbook over the dashboard for line-of-sight to GPS satellites, driving at 70mph. Netbooks with their limited battery lives would make for poor trekking-in-the-Rockies aids (and why would someone carry a netbook instead of a small portable tom tom up the trail anyway)?.

But the guys at Dell must have thought of all this. Even after you remove the management, sales, and product-team views on such matters, there must be someone who tried to write up credible use-cases. What is the killer-app use-case?

In my opinion, there is a very significant business-opportunity here. Dell wants to know where you are, in order to introduce location-based services (e.g. locality-aware advertising) in return for GPS map services. If you think about it, operators have an advantage over other IT vendors because they know (through cellular triangulation) where a user is. Hardware and software vendors would also want a piece of this action because of the significant scope for location-based advertising. GPS gives them that chance (and more accurate location information). Dell could know, through its GPS/map services, that its 13:00 on a Wednesday afternoon and I am sitting in a downtown Berlin park about 3 minutes walking distance from a restaurant serving schweine haxe and Berliner pilsner. I bet I'd take the bait of a 10% coupon to get there! And Dell would get a piece of the pork too.

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