If you shelled out hundreds of dollars for a new GPS navigation device a couple of years ago, it may drive you crazy to see what they're selling for on Black Friday. In response to changes in the market, portable navigation devices (PNDs) will go for as little as $59 for a TomTom at Wal-Mart and $99 for a Garmin at Best Buy. Radio Shack lists the Mio M400 for $79.99. Those are bound to be hot tickets when stores open Friday.
"Typically, doorbuster deals tend to be loss leaders designed to attract store ," said Steve Koenig, director of industry analysis for the Consumer Electronics Association in Arlington, Va. "The idea being to get you to the store to buy other merchandise."
But don't be surprised if the shelves empty quickly.
"This year in particular, while we are seeing the regular raft of deals, there are very limited quantities on hand," Koenig said. "The channel is being very conservative because of the recession. They want to estimate demand and not get stuck with inventory after the holiday season. They need to clear merchandise and turn over the shelves to next year's models that will be shipping soon."
"That being said, there is an abundance of deals that are really highlighted over the Black Friday weekend," he said.
Initially a hot item as drivers grabbed up the chatty devices to avoid fumbling with maps or printing directions from Google or MapQuest, GPS sales doubled from 2005 to 2006. But the devices, which use technology formerly available only to the military, have sold much slower in subsequent years.
The PNDs are facing stiff competition from factory-installed units and the increasing availability of navigation services on cell phones, such as Verizon's VZ Navigator and AT&T's Navigator. The Verizon service costs $2.99 per one-day use or $9.99 per month.
NDP Research, a firm that, well, tracks the industry, reports that in-dash navigation units saw 26 percent growth in June from June 2008. During the same period, portable GPS sales only grew four percent.
According to the blog GPS Obsessed, PND sales have dropped 24 percent since last year, with 84 percent of the devices now priced under $200.
An April market research report by RNCOS projected that navigation-device revenue will reach around $9.8 billion in 2013 and that GPS-enabled handsets will account for around 70 percent of the market.
But don't count out the PND just yet, Koenig said.
"In 2010 you're going to see more see more navigation [phone] and more vehicles with fixed navigation either standard or as an option," he said. "But that will force [PND] makers like Garmin, Magellan and TomTom to bring forward devices that are more innovative above and beyond this generation. They have to convince people to spend $200 on a dedicated device rather than pay $10 to $30 to download an application to your phone."
The "ray of hope," he added, is that better quality camera phones have not killed the digital camera market, nor have music-capable phones finished off the iPod.
The advent of smartphones "has had an impact on the market, but it hasn't been a category killer," said Koenig. "People don't want to use their phones for everything."