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Drivers may have to navigate around ads

| Saturday, March 8, 2008

If you are appalled by drivers weaving through traffic while jabbering on cell phones, much worse vehicular distractions loom with the rising popularity of personal navigation devices.

Technology offered by a collaboration of wireless carriers, mapping companies and device makers such as Garmin Ltd. and TomTom NV will allow retailers to notify passing drivers about discounts or sales promotions.

Imagine receiving an audio alert while driving, accompanied by a shrill audio command to turn left at the Nordstrom Inc. outlet 400 feet down the highway, simply because the price of your favorite Hugo Boss jacket was just reduced by 25 percent.

Global positioning systems, cell-phone towers and clever software today are able to turn vehicles into rolling shopping and infotainment centers. Luxury-car makers have been installing navigation systems in their vehicles for about a decade, at a price of $2,000 or more.

Yet handheld navigation is now attracting the masses, with the price of some devices falling to less than $200.

Cell-phone makers aren't missing a beat. Some phones already feature global positioning system receivers and mapping software to help locate potential shoppers.

"My gut feeling is that portable nav systems are cool for now, but carmakers with embedded nav systems are well aware of the competition," said Jon Bucci, a Toyota Motor Corp. manager for advanced technology.

Toyota, for the first time, is offering navigation in its Corolla and Matrix small cars at a price of $1,300. Buyers of one version of Toyota's 4Runner sport-utility vehicle get a TomTom portable system.

Last week, TomTom said the U.S. market for portables may double this year to 20 million units.

Last year, TomTom offered to buy Tele Atlas NV, the world's second-largest maker of digital maps, for $4.4 billion so it can provide updates to its customers. The European Union is examining the transaction to find out whether the deal will make Tele Atlas maps more or less expensive.

Shortly after TomTom's announcement, Finland-based Nokia Oyj, the world's biggest mobile-phone company, agreed to buy Navteq Corp., the world's biggest digital-map maker, for $8.1 billion.

The EU's investigation of TomTom may be helpful to consumers, since the expense of maps and updates turns out to be considerably higher than the cost of the hardware. I bought a Garmin Nuvi 360 for about $250 before a vacation last month in Spain. It came preloaded with U.S. maps, but I also needed a set of relevant European maps, which cost an extra $300.

A dilemma for carmakers is how much to allow retailers and others to use navigation devices as a portal for commerce. There may be vast sums to be made by letting retailers into cars.

Doron Levin is a Bloomberg News columnist.

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