Black Friday PND Pricing: Top Brands Lead Price War

White box manufacturers lose their appeal among consumers.

iSuppli Corp.’s Automotive Research group has tracked Black Friday Portable Navigation Device (PND) pricing for the few past years because it is a significant indicator of PND commoditization trends. This year, iSuppli found that more than 20 retailers were selling about eight brands across the nation.

This article will focus on traditional brick-and-mortar retailers rather than online distribution channels, as the deals on Cyber Monday were not that different from Black Friday’s. The best deals could be found on Black Friday rather than on the Internet.

TomTom and Garmin
The TomTom ONE 125-SE from Walmart at $59 was the cheapest model overall this year. This marks a first for a brand-name model to be the lowest priced deal.

Among the 20 available TomTom models in the United States currently, more than 10 models could be found in a variety of retailers, including department stores and office product stores. Two models were newly introduced at Walmart for Black Friday. TomTom’s models were discounted on average 45 percent to 47 percent at retailers.

Garmin’s models were discounted on average by 40 percent to 42 percent at 15 retailers. Garmin’s cheapest model was priced at $69.97 at hhgregg. Best Buy offered the entry-level model, the nuvi 205, at $99.99, while PepBoys, Sears, OfficeMax and Micro Center sold the same model even $10 cheaper.

In previous years, Garmin’s least-expensive models were priced $10 or $20 higher than TomTom’s cheapest and the trend is more or less the same this year. Garmin’s cheapest model was priced in a range from $110 to $120 in previous years. Garmin is still using restraint rather than dropping prices dramatically in order not to erode its Average Selling Prices (ASPs) and lose its asset as a name brand.

Garmin’s strategy has worked during the last two years, but if the company’s PND inventory is higher than it was during the last few years, Garmin could have some last-minute aggressive sales prices going forward. In other words, PNDs won’t sell out like they did previously; hence, Garmin’s strategy may not work this year.

Magellan and Mio
Five Magellan models were discounted on average 44 percent at eight retailers. The price of the models ranged from $79.99 to $199.99. Mio is utilizing existing Magellan distribution channels with current products for U.S. sales, including non big-box retailers depending on the product lines. However, just one Mio model—the Moov M400—could be found only at RadioShack at $80, representing a discount of 47 percent.

Other Tier-2s
Only three tier-2 brands, Rightway, Nextar and Maylong, were present at retailers this year. Rightway’s RW400 PND was priced at $59.99—with a Manufacturer’s Suggested Retail Price (MSRP) of $149.99, marking the second cheapest deal on this year’s Black Friday PND list. Its features include text-to-speech, preloaded maps of the United States, fuel saver and fuel cost calculator functions, built-in media player and media card slot.

Nextar only had one model available at two non-CE stores, OfficeMax and ShopKo, and its 4.3-inch fourth-quarter model was $20 more expensive than TomTom’s cheapest model at Walmart.

The Maylong Group, which licenses the “Navigation for Dummies” brand, targeted drug stores as it did last year. This year the company offered two models: the FD-220 GPS for $69.99 and the 4.3-inch FD-420 model for $79.99.

Conclusion
The major trends for this year’s Black Friday PND pricing include:

* The TomTom model from Walmart at $59 is the cheapest model overall.
* This marks a first for a brand-name model to be the lowest-priced deal. Very few Tier-2s and no-name brand models can be found this time, which used to lead the aggressive price drops in previous years. Retailers might have realized they must utilize more brand name models to attract more PND consumers. This also confirms iSuppli’s observation that volume players are winning in the PND industry.
* Last year, PNDs were hot and the mass merchants that were selling Nextar wanted to get customers in the store. This year is different, since PNDs are not as hot. It would be fair to say that most consumers would prefer to buy a known brand rather than a white label. Now that TomTom and Garmin units are so cheap, there is nowhere for the white-label brands to go as price was their main weapon.
* Clearly, this year’s PND pricing is much more aggressive than last year’s. The cheapest model was $20 less than last year’s. The discount rate of each retailer ranged from 22 percent to 64 percent and the average discount rate of retailers was around 45 percent. Last year’s Black Friday sales showed that the PND suppliers learned from 2007 and showed restraint in reducing prices. The 2008 Black Friday PND prices were about the same as in 2007 and the aggressive price drop shown in 2007 did not happen. The best bargains in 2008 were actually available in the non-traditional PND resellers and were in the $80 range.

iSuppli believes that 2010 PND pricing for entry models will continue to decline, but overall PND pricing will be moderate because Connected PNDs (C-PNDs) will partially make up for the decline. In other words, the mix will change towards C-PNDs, which helps average out the prices.