DETROIT -- Integrated car-navigation systems need to get better and cheaper—or other navigation technologies will blow right by. Regardless, the best the automakers can hope for is a delay in the inevitable, because the embedded car navigation system (which first appeared in the mid-1990s) will lose its dominance in a couple years.

That was one of the predictions made by Thilo Koslowski, vice-president for automotive at Gartner Inc., at the annual Telematics Detroit conference. Navigation is a magnet for controversy: It's the most costly and most polarizing technology device inside the cockpit, especially when it's manipulated by a cockpit controller such as BMW's iDrive or Audi's MMI.

Navigation used to be about mapping a route and guiding you to your destination; progress meant increasing screen size, adding more data by going from CD to DVD discs, and updating routes in a second or two instead of half a minute. As prices get lower and basic mapping information becomes commoditized, though, customers are looking for more than just moving maps and turn-by-turn instructions.

"Disruptive forces will ultimately lead to navigation applications losing their premium status and becoming ubiquitous at low price points," Koslowski said. He believes this could happen in five to six years, and if he's right, automakers that are locking in 2009 cars now have only a year or two to react.

To maintain buyer interest, automakers can add functionality to the nav system and an in-dash display to show real-time and predictive traffic reports or weather overlays, or to use as infotainment panels. So far, automakers have been reluctant to include LCD panels in a new car unless it comes with the navigation system; those who do, however (as on some Acura and Mercedes-Benz models) can then sell a navigation system for about $1,000; it can be a dealer retrofit, too.

More people want navigation systems than own them. In both the U.S. and Europe, 40 percent of the buyers say they want navigation systems, according to Koslowski, but ownership of embedded or portable navigation systems amounts to just 8 percent here and 20 percent in Europe. In an earlier presentation, Harvey Cohen, CEO of Strategy Analytics, pegged the number of people broadly interested in navigation systems at 70 percent.

Customers also don't want to pay what manufacturers want to charge. According to research company Gartner, most U.S. prospects think a navigation system should cost $500. A few portable systems currently sell for that price, but most embedded (automaker-supplied) systems cost $1,000 to $2,500, with the bulk at $1,500 to $2,000. Owners of fleet vehicles say they'd spend $250, tops. A quarter of U.S. prospects say they'd prefer a portable navigation device that they could take from car to car or use while hiking or walking around.

Opening electronic access to the car—whether by legal mandate (required diagnostics connectors), by entertainment (such as the MOST bus in high-end cars), or by already widespread consumer devices (cell phones with Bluetooth)—means that portable devices may gain access to the car's speakers, GPS sensors, antennas, and possibly console displays, making them seem almost integrated. If an entertainment bus can pass information to an instrument cluster panel capable of showing the outside temperature or the song that a dealer-installed satellite radio is playing, that same display can be hacked for a $600 portable navigation device. Automakers may talk the safety-first talk, but they've already firewalled off the infotainment network from the engine and airbag controls. So what they're really saying is, "We make more money from accessories, and now we're losing a grip on that."

Koslowski laid out three phases for the maturing navigation industry.

1. Improved interfaces and more functionality, such as the predictive traffic information announced at Telematics Detroit by Microsoft spin-off Inrix.

To read more about Inrix's real-time traffic reporting system, click here.

2. "Personalization," such as calendars, time management, and media applications. A few nav systems include calendars with rudimentary appointment books, but they can't be transferred from PCs or PDAs. The goal is that your appointments calendar and probably your address book would be wirelessly replicated every time you made a change on your PC.

3. Legislative compliance, meaning the car will be able to calculate and report costs involving tolls, time-of-day usage charges, and pay-per-trip or per-mile car insurance. Like it or not, some of this may be coming, and the question is whether the car's microprocessors manage it, or whether third party transponders (like E-ZPass toll tags, but more complex) are required.

In case this sounds too much like Big Brother, it might work the other way, too: Koslowski suggested one of the map overlays for the navigation system that would be popular with motorists would be current locations of photo radar cameras.

The Telematics Detroit show also had sessions on understanding and making money off the "iGeneration," a codename for younger drivers who bring iPods and other entertainment devices into their cars and expect connections to the car audio/video system; vehicle communications services such as OnStar; how automakers with their longer lead times can keep pace with the quick time-to-market of electronics, communications, and entertainment providers; and on the "value of a standard general-purpose [car] operating platform" presented by—surprise—Microsoft.