2010 Prediction No. 2: Navigation applications will shift from premium to ad-subsidized

Among the many game-changing moves made by Google in 2009, none will have a more immediate impact on its particular mobile industry segment than the late October launch of Google Maps Navigation [1], a turn-by-turn navigation application issued conjunction with the update Android 2.0 operating system. Boasting all the familiar bells and whistles of rival GPS-based systems--e.g., 3D views, voice guidance and automatic re-routing--Google Maps Navigation also was built to take advantage of smartphones' constant connection to the Web, enabling features like real-time traffic views, street and satellite views, updated map and business data, and searching by voice, plain English or according to routes. But perhaps the biggest distinction separating Google Maps Navigation from rival location applications is its price: The Google app is free, a radical break from subscription-based solutions priced at $5 or $10 per month.

Google Maps Navigation will presumably follow the Web services giant's now-familiar advertiser-supported model--what's different this time around is the potential value of ads directly integrated with software that can target a user's precise location and destination. For the average consumer, the choice between a premium navigation application and a free solution offering similar or even superior functionality won't pose much deliberation--Google's competitors have few options but to abandon their current business models, and should do so quickly, while Google Maps Navigation is still limited to a handful of Android smartphones. By the time the application spreads to a larger number of Android devices, all of them running on an operating system Google controls, premium providers will have lost their way for good.