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This doesn't necessarily mean that TomTom and Garmin are going out of business. But it means that this entire space has fundamentally changed, and the market reacts to developments like that.
Do they do have something to fear? Absolutely. Google Maps Navigation isn't some half-baked, crippled free version of GPS turn-by-turn navigation. In most areas, it's comparable with standalone GPS navigation solutions, and it even brings some novelties to the table, for example Google's fantastic satellite view and Street View. The folks over at Engadget have tested it out with a Droid, you can check the results in the video below.