TomTom’s shares are down 45% this year. Garmin’s are down about 40%. SiRF, which makes GPS chips, has seen its shares fall 80% this year, and they are laying off large numbers of people to cope with the losses.

Why is this happening? All the world loves driving, and all drivers love GPS. Right?

Actually, right. People really do love their GPS devices, just as much or moreso than they did in 2007, the year GPSs broke wide. But there are other factors at play in the 2008 automobile market.

Gas prices
Stories on the evening news about gasoline prices reaching (say it with me) “an all-time high” are becoming ho-hum, we see them so often. The price of gasoline is so out of whack with what it used to be that it is actually affecting what add-ons and gizmos people buy - or whether they buy any at all.

Technologies merge
GPS technology may be too popular for the ailing GPS market. Huh?

People love the idea of GPS positioning so much that it is increasingly showing up in other devices - computers, cell phones, PDAs, etc. Consumers love devices but they also, slightly paradoxically, love fewer devices - this is, devices that do the work of several in one unit. Why have a cell phone, an mp3 player, a GPS and a PDA when you can get one that does it all in a small unit, with extra features to boot?

Standalone GPSs may (very) soon look as quaint as “car phones” from the 60s and 70s that were as big (and the same shape) as house phones were. Nobody notices their inherent clunkiness now, but eventually the style and size of GPS found in automobiles will shrink, evolve and be integrated into other devices, and the units now being sold will seem rather ridiculous.

The dramatic fall of GPS’s biggest companies so far in 2008 may already be an indication that the end is nigh.

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