It would be hard, perhaps impossible, to pinpoint the first historical instance of when a society’s older generation became any combination of puzzled, alarmed or even morally outraged by the strange behavior of the younger layers of society, that it had always assumed would proudly and dutifully carry its legacy into the future. Perhaps it is because of this unfortunate absence of historical knowledge that society’s older generations continue to react in the same predictable way each and every time the young engage in activities or otherwise behave, wittingly or otherwise, in ways that may appear foreign and bizarre.
An example from modern times illustrates this dynamic rather well, and comes to us in the form of the ever-ready wonderment about what very strange things that the “millennials” seem to be up to. For anyone who has not been exposed to this buzzword, a millennial is a person who reached young adulthood around the year 2000.
The latest fascination with the proclivities of this demographic has been its apparent disinterest in driving. The New York Times reported on it back in May, and NPR has aired a pair of stories on the topic over the past week. Highlighted in these three examples is the fact that younger people are driving less, and getting cars and licenses later in life, even amid the urban sprawl of Los Angeles where the consensus among seasoned adults has always been that one simply cannot make do in that city without a car.
Some of the suggested explanations for this phenomenon are that young people entertain different notions about ownership, or that they prefer lived-experiences to owning stuff. By far the most convincing-sounding explanation, however, is that the car is no longer the Holy Grail of freedom that it once was for the young, and this is the opinion that certain automobile manufacturers have been coming to recently.
General Motors (GM) in particular is beginning to see the situation for what it is, namely that the smartphone has replaced the car as the preferred means of accessing freedom for today’s young adults. To respond to this situation, companies like GM and Volkswagen are trying to find inventive new ways of incorporating the most attractive features of the smartphone into the behind-the-wheel experience.
Forgotten in all of this, however, are the potential consequences of this endeavor on the part of automobile companies for manufacturers of GPS devices, like Garmin (GRMN) . Indeed, such companies are already feeling the pinch as consumers can simply use free downloadable driving apps such as the Google (GOOG) -owned Waze, and mount their smartphones on to the dash of their cars using a simple piece of plastic. The more the smartphone is integrated into driving experience, companies whose main source of income was the sale of car GPS devices are likely to struggle unless they can find other uses for their product.
There are a few GPS-device manufacturers that could be hit by the smartphone trend:
Garmin Ltd. (GRMN) – In 2007, Garmin was trading for around $120 per share. Now, however, the manufacturer of hand-held GPS devices has a market cap of $7.7 billion, and shares are just over $42, and haven’t traded for much higher than that since reaching the all-time high some 6 years previous.
TomTom NV – (TMOAF) – Automotive is only one of the company’s four operational segments, so it may have a future, but revenue will take a hit from the loss of cars to smartphones. The Amsterdam-based company has a market cap of $1.4 billion and trades on the OTC markets for $6.30 per share, less than a third of what it was trading for back in 2009 when shares were barely $20 a piece.
It must be said that at no point is it considered that cars might simply be too expensive for young people, who in this day and age are confronted by not-negligible obstacles such as higher unemployment rates than other age groups, not very attractive career prospects when jobs are available, rising tuition and living costs coupled with cutbacks at educational institutions, and so on, that push owning a car to a lower rung on the list of priorities (nor, for that matter, has anyone proposed that the strange habits of the older generations be scrutinized in such a clinical fashion).