Thursday, May 10, 2007

Navigation systems make your car depreciate faster

Adena at All Points Blog references a story about how cars depreciate faster if they have built in navigation systems. Which on the surface of it is not good news for those of us who always buy cars with cool built in navigation systems :) !! However, when you think about it, this is just a logical consequence of the fact that cars are becoming more high tech devices. When you buy a digital camera, you can guarantee that within a few months there will be something better and cheaper on the market - you don't expect to have a good resale value on it in 3 years time. Over the next few years we will see a lot more technology coming into cars, including much more in the way of online information systems - real time traffic information, gas prices, etc - so I think the trend of cars depreciating more rapidly will continue. And I don't think that this necessarily indicates that portable systems will overwhelm factory installed systems - the latter tend to have various features that the former don't, for example they mute music playing in the car when they need to speak directions, and many of them integrate with inertial systems in the car so that they can continue to work when a GPS signal is not available (for example when going through a tunnel). However, I think that car manufacturers will need to work on making their software systems (not just for navigation) more easily upgradeable - though again I think this will be a logical step as we move to a situation where most cars have wireless connectivity.

Finally, as Adena mentions, there is a quote in the article that navigation systems are now being "sold everywhere. You have Bed Bath & Beyond selling portable navigation these days. It's bizarre." I guess navigation systems would fall into the "Beyond" category :) ?!


Unknown said...

It doesn't seem to be so much that technology becomes cheaper in its newest renditions - as much as technologies become relatively deprecated in time, making past renditions cheaper (as a third-market product) as well as frequently finding their place in obsolescence.

In the case of navigation and many other mobile devices - that don't follow strict standards for backward compatibilities - this is often the case. In the case of photographic equipment, they do follow backward compatibilities, aside from certain packaged software or drivers to interact with a host computer or software. Huge difference in my opinion.

Peter Batty said...

Hi Daniel, I don't disagree, I should have said better and/or cheaper. My point was just that in markets where technology is developing more quickly, products depreciate faster, for either reason.

Unknown said...

Agreed. But hopefully we can agree that one of the aggravations of GPS and similar technologies has been a lack of adherence to basic standards - so that backwards compatibilities defect the depreciation curve.

Navigation systems in cars, by example, one would think that backwards compatibilities should be at the forefront of the developers' minds. The last thing one would want is a device or service that becomes obsolete within only a couple years' time - incapable of upgrades or enhancements.