Wireless Traffic Updates Pick Up Speed

By Amy Gilroy On Apr 9 2007 - 6:00am

Momentum is gathering behind services that deliver real-time traffic updates wirelessly to installed in-car navigation systems and to portable navigation devices (PNDs).

This year, more services are online in more geographic markets, and more hardware suppliers are incorporating real-time traffic as an option in their GPS devices. As a result, more than 100,000 people are expected to subscribe to such services by the end of the year, increasing rapidly to 4.2 million over the next five years, according to TRG, a research company based in Minnetonka, Minn.

TRG's numbers consist of real-time traffic data received by in-vehicle and PNDs, but if you add services that deliver data to GPS-equipped cellular phones, the numbers could increase dramatically. That's because 17.8 million handsets are expected to offer navigation by 2011, and a portion of those phones will include real-time traffic, TRG said.

Suppliers of traffic service include Clear Channel Radio, Navteq, XM NavTraffic, Sirius Traffic and Microsoft, which recently entered the market via its FM-sideband MSN Direct network, part of Microsoft's Smart Personal Objects Technology (SPOT) initiative.

Last year was a breakthrough year for the market because many leading PND makers began offering traffic for the first time and at a fairly inexpensive subscription price of about $60 a year. Now, third-tier brands are entering the fray.

Clarion will begin shipping a traffic cable with an antenna and built-in receiver this month to connect to its N.I.C.E 430 PND, which was introduced in January. The NAV-RDS cable works with Clear Channel traffic at a street price of $49.99. Service is free for 90 days and costs $60 per year thereafter.

Dual says it will offer real-time traffic this year, and Navman will make it available in the third quarter. Delphi also began April 2 shipments of a $199 traffic kit that includes lifetime traffic service for the company's NAV200 PND.

These brands join earlier entrants including Garmin, Magellan, TomTom, Alpine, Pioneer, Cobra and Kenwood.

"About a year ago there were only two car [models] on the road with real-time traffic, and last Christmas there were over a dozen. By the end of 2007, there will be three dozen vehicles with real-time traffic," said Bryan Mistele president of Inrix, which supplies traffic information to companies such as Clear Channel. "In PNDs, a year ago there was only one, and this Christmas, six of the seven top suppliers offered real-time traffic."

One of the key reasons for the market surge is that the traffic data is now available in 50-plus markets across the country compared with two years ago when less than half that coverage was available. And coverage continues to broaden. Clear Channel, for example, serves 50 markets or 136 million people but plans to expand its footprint to markets with an additional 25 million people this year. Navteq is available in 80 markets and expects eventually to reach about 100.

For its part, XM just announced expansion from 44 to 50 markets, including Montreal, Toronto and Vancouver. XM VP Rod MacKenzie, however, noted that "Our 50 markets would equate to 75 markets by others' calculations. We see [eventually] getting to 100 cities of coverage. By the time you've got to 100 cities, you've covered everywhere traffic is a factor."

Real-time traffic "is really taking off," claims Clear Channel executive VP Jeff Littlejohn. "In some months, we see 15 or 20 percent growth in subscribers. We're into the many tens of thousands of subscribers now."

Traffic technology also continues to advance. In the next 60 days, Clear Channel will begin broadcasting real-time traffic over HD Radio, which will allow data to be accessed at about ten times the speed afforded by most other services, said Littlejohn. It will launch over about 100 Clear Channel stations. Navigation devices able to receive HD Radio traffic are expected to be offered this fall by several suppliers, he said.

Alpine confirmed it is considering an HD Radio PND. At January's International CES, Navteq demonstrated the ability to deliver traffic over HD Radio, said HD Radio developer iBiquity. The company's advanced services VP Joe D'Angelo said he expects that several HD Radio traffic products will be available at CES next year.

Initially, HD Radio traffic receivers will be more expensive than current models that work over analog-FM sidebands or satellite radio because the technology is new. Navteq's Hayes estimates the manufacturer cost of an HD Radio signal decoder is $40 to $50 compared with FM RDS decoders, which have already come down the cost scale to between $5 and $10.

Another market development worthy of watching is the entry of Microsoft into real-time traffic. In March, a Garmin nuvi PND began shipping with a Microsoft-based traffic service under the software giant's MSN Direct network, which also offers real-time gas prices, movie listings and weather.

MSN Direct is expected to be offered by other navigation device makers in the future, although Microsoft would not comment on future products. "When Microsoft enters the market, everyone pays attention," said a Magellan spokesman.