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Is the TomTom Car Kit Too Expensive?

Sep
25
2009

Now that we know the cost of the TomTom Car Kit is $119 there has been a lot of chatter about the price, wondering if it is too expensive. Of course, we have some thoughts about this. So let’s break it down based on what you get and comparing it to similarly equipped PND devices.

For simplicity, we will just round all of the prices up to the nearest dollar. We will also start just by comparing MSRP prices.

The app is $100 and the mount is $120, bringing the total cost of the package to $220. For this price, you get GPS navigation software, a (supposedly) nice speaker, microphone, Bluetooth, a solid GPS chipset, charge cable, and mount. You are bringing your own 3.5″ screen.

Garmin Comparison

The most similarly equipped GPS device I could find (3.5″ screen, relatively new product, Bluetooth, cable, mount, etc) is the Garmin Nuvi 265T. The retail price of the 265T…. $220, exactly like the TomTom setup. “Street” prices are a bit better, running around $175 – $195 on average. If the TomTom Car Kit were to get wide distribution to retailers, then perhaps the price would come out to $100 for the Car Kit and $100 for the app, bringing the total price to $200– not too far off from current street prices for the 265T. One difference of course is that you are purchasing a screen with the 265T and with the iPhone package you’ve already purchased that part. :)

TomTom Comparison

Now let’s look at where the TomTom iPhone package fits into TomTom’s lineup. This gets a bit trickier as it doesn’t slide into their lineup perfectly. The 630 is the first device that gets Bluetooth which has a retail price of $300. The next “lower” product is the XL-340s at $250. However with these two devices you get a widescreen. On average a widescreen adds about $60 to the price of a GPS over an otherwise identically equipped GPS. So if we try to estimate the 630 and XL-340s without a widescreen, we’d get prices of $240 (with Bluetooth) and $190 (without Bluetooth). So again, the total package price of the TomTom app plus Car Kit fits nicely between those figures, but again… you are not getting a screen since you’ve already purchased one.

Other Features

We mentioned that in these feature comparisons you are paying for a screen with the PND devices but with the iPhone app you are bringing that along yourself. Another big difference is that the GPS devices we used to compare have Text To Speech (TTS) and are generally Traffic Capable. Currently the TomTom App does not have either of those features. I believe TomTom has pegged TTS as a priority for their iPhone app. Specifically TomTom has said this:

TomTom will launch several updates by the end of 2009 that will include improvements on the general performance of the app, as well as additional features and technologies.

All of the updates that TomTom will launch in 2009 will be free to customers that have bought the TomTom app before the update release!

I believe TTS is a top priority, if not the number 1 priority. And fine examination of the app reveals that files necessary to make traffic work on other TomTom devices are present in the TomTom app, making traffic likely to appear as well.

The Bottom Line

There is no doubt that for many iPhone owners the combined price of $220 for the app plus Car Kit will cause sticker shock. iPhone owners are used to a plethora of free and $0.99 apps and this package is not in that league. On the other hand when you compare the package feature for feature against other TomTom devices or competitive devices with similar features, the price doesn’t seems to slide in very nicely.

Having extensively used many of the iPhone navigation apps over the past few months, the largest issues are the battery drain, mount issues, and most of all the weak iPhone speaker and sometimes weak GPS reception. The Car Kit (should) solve all of those and if so will make it a very worthy competitor to the traditional PND. Is it worth the price? — That is up to you but this analysis shows the price isn’t as out of line as the initial sticker shock might have you think.

10 Responses


  1. “a (supposedly) nice speaker, microphone, Bluetooth, a solid GPS chipset,”

    My iPhone already has these. Why purchase it again? Give me a dumb mount that looks nice and charges for 50% and we’ll talk.

    DaveZatz - September 25th, 2009
    • That’s a good point, Dave. (And nice to see you BTW.) While I don’t want to pay for those things I already have either– quite frankly I think the iPhone’s own speaker, mic, and GPS chip are poor. If you are already using a Bluetooth headset or other Bluetooth hookup then this Car Kit might not be worth the cost. But the iPhone’s speakerphone and microphone are too weak to use in the car by themselves and all of the navigation apps can’t push the volume of the iPhone’s speaker loud enough for clear voice prompts at highways speeds. My experience with the iPhone’s GPS chip isn’t stellar either and I see it putting me on the wrong road (with all of the nav apps) about once per hour.

      But it sounds like the Navigon iPhone Mount might be right up your ally. :)

      Tim - September 25th, 2009
      • I don’t have any serious issues with TT pricing the active dock at $120. I understand if TomTom has concerns about losing pnd’s sales if the iPhone solution significantly undercuts their entry-level standalone devices. They also don’t have the luxury of supporting break-even introductory pricing to get the ball rolling. They’ve made a serious and significant commitment to mobile devices as their future. Cut-throat pricing isn’t going to give them the revenues to continue mobile product development. In addition there’s no current competition for a dock with those features. I don’t think it will be long before the price will come down. More and more companies will be offering active docks at much lower pricing as the months go by and TomTom will adjust as necessary. In fact if Apple decides to add a serial port to the next version iPhone there’s already solutions available at much less money. With any of these devices, there’s a pretty narrow window of opportunity to reclaim your investment. I wouldn’t expect TT to sell a unique accessory with a limited market life and significant development costs for much less. That doesn’t mean people will buy it. For many users, Navigons’ mount will be perfectly acceptable at less than half the cost.Yes,TT’s mount is a pricey investment. But I understand the reasons behind the price.

        gatorguy - September 25th, 2009
  2. Yep, way too much. I think we had speculated that it would be 200$ combined, but with a 135-150$ entry price point for a period of time. No WAY anyone should pay 400$ for a device and then 220$ +tax to make a good quality GPS out of it. I think the sales for TT are going to suffer because of this. I for one will stick with the other options, like copilot from ALK and even the AT&T supplied Navigator in the USA for 10$ a month of use. Copilot will offer live traffic soon for 20$ a year fee which is MUCH less than the others and offers some real value. I probably wouldn’t even do the TT for 150$ though, although it would be a much more compelling argument.

    tivoboy - September 25th, 2009
    • Nobody is going to buy the iPhone simply so they can purchase the Car Kit and the app– so you can’t fairly factor in the price for the iPhone itself. To make that sort of comparison you would then need to say that a stand-alone GPS doesn’t come with the ability to make phone calls, install third party apps, doesn’t have text messaging, don’t have internet connections, don’t have email, etc.

      Tim - September 25th, 2009
      • I agree with the first point, but don’t agree with the overall concept, that being aggregate price and “cost” For a PND, as you have noted above the aggregate cost is similar, but a user has already spent 400$+ on a phone, so they may be spent. As for “cost”, in a PND there is all the HW cost, R&D, shipping, returns expense, etc. With a simple software application that leverages an existing hardware device, this is reduced almost to zero. Great for TT (higher margin on SW sales) and the HW piece from TT is relatively low cost as well, clearly nowhere NEAR the 120$ price point they are selling it at. So, it would be GREAT for TT from a HW and SW margin standpoint, but I don’t think it reflects reality for what the customer is willing to pay in the aggregate and what the customer thinks/feels is appropriate. From comments on other blogs and posts, the overwhelming majority of users are saving, F you TT, forget it, I’ll take my business elsewhere, etc. That is NOT a good response for any company and is a very hard thing to come back from.

        tivoboy - September 25th, 2009
  3. Well, the Nuvifone is finally out and for sale in ATT stores so there is a new competitor. It comes with a typical Garmin mount and sells for $300.00 total after rebate. So, it looks like a good basic phone and gps unit. Will people buy it when you have the iphone app market to miss out on remains to be seen. But, for a lot of typically used features, and always the potential for apps in the future, the Garmin phone looks good.

    TimE - October 6th, 2009
    • I forgot to set up the e-mail alerts.

      TimE - October 6th, 2009
  4. The carkit was finally released for sale today in 16 European countries. TomTom has said “It will be available in the US on the TomTom web store and in US Apple online and retail stores in the near future”

    gatorguy - October 12th, 2009
  5. Megellen will be comming out with their car kit soon. It probably cost just as much, but we may have a price war. If the kit came with the app, then those might be a better price, much more comparible to dedicated units with generally better, less glare screens.

    Franklin - December 27th, 2009



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