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Last updated: Thursday, December 10, 2009

The Google threat hit home on Black Friday for TomTom and Garmin. The two foremost makers of personal navigation devices slashed prices more aggressively than ever on the first shopping day of the 2009 holiday season, according to figures released Dec. 8 by market researcher iSuppli. In U.S. retail stores, TomTom cut the price of its One 125-iSE to as low as $59 on Nov. 27. The device, available only at Wal-Mart, typically sells for $79, indicating a discount of about 25 percent, says iSuppli analyst Danny Kim. Garmin’s cheapest model the day after Thanksgiving was priced at just below $70 at retailer Hhgregg. Kim says Garmin’s Black Friday discounts averaged 40 percent to 42 percent. Its entry-level Nvi 205 usually sells for $99. Steep Black Friday discounts have become an annual ritual in the market for personal navigation devices, or PNDs, which use Global Positioning System technology to provide mapping and other navigation data to users. But the price cuts were more pronounced than ever this year, reflecting accelerating competition from the Google-backed Android operating system and other software makers that are churning out low-priced or free navigation applications for smartphones. “These devices are quickly becoming a commodity,” Kim says. On Oct. 28, Google announced plans to bring free turn-by-turn directions to the Google Maps application on smartphones running its Android operating system. The following day, Garmin stock dropped $6, or more than 16 percent, to 30.85. TomTom stock suffered more, dropping by nearly EU3, or 29 percent, to 7.27 on the Euronext exchange. Neither stock has recovered. On Dec. 8, TomTom closed at 6.755, while Garmin closed at 30.03, down 17 cents. Analyst Appraisals Garmin gets about 66 percent of its sales from PNDs. It will struggle to compete in a market where consumers can get navigation software for next to nothing, says…

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Garmin, TomTom Slash Prices Amid Google Threat

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