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Electronics Production | September 21, 2007

PNDs becoming "must-have" for motorists

Personal navigation devices are hot, but GPS-enabled phones emerge as an alternative, according to iSuppli.
Since the start of 2006, awareness of GPS-based navigation technology has exploded into the public consciousness, moving rapidly from the “nice-to-have" to the “must-have" category.

PNDs: The $16.5 billion jackpot

The star du jour of the GPS market is the Personal Navigation Device (PND) segment, which continues to develop rapidly as vendors aggressively cut prices to maintain their share of sales amid tough competition. However, with PNDs now in the growth phase of their product life cycle, prices have gone south, with the Average Selling Price (ASP) falling 23 percent year-over-year in 2006. In spite of these dramatic price cuts, the revenue from PNDs is expected to increase by four-fold between 2006 and 2013, with manufacturers keen to get their hands on a $16.5 billion jackpot in 2013.

The attached figure presents iSuppli's forecast of worldwide PND shipments and revenue for the period of 2006 through 2013.



iSuppli estimates 40 companies now are offering GPS navigation capabilities on a range of products, from PNDs and embedded systems, to smart phones.

The navigation market used to be clearly segmented into two separate product families: embedded systems and PNDs.

The more costly embedded systems offer the benefits of integration with improved positional accuracy on a large dash-mounted display. PNDs offer most of the important navigation features on a device priced for the consumer mass market.

“The general interest in GPS solutions has created a third entrant in the market: the smart phone," said Richard Robinson, principal analyst for automotive electronics at iSuppli. “Smart phones have the capability to offer wireless Internet connectivity as well as improved positional accuracy in difficult geographic locations using Assisted-GPS (A-GPS)."

Shipments of GPS-enabled mobile handsets are expected to reach 250 million units by 2010, up from more than 70 million units in 2006, according to iSuppli. While this represents a strong growth opportunity for GPS silicon providers, if even a fraction of this market takes navigation as an option, it would also present a significant revenue opportunity for the rest of the navigation value chain,
from map-supply and memory to Location-Based Services (LBS). A key market driver is expected to be the requirement for Enhanced 911 (E911) in the United States. E911 is a feature that automatically associates a physical address to a mobile number.

Other market drivers will include the growth in location-based services and mapping applications for mobile devices from a range of third-party suppliers and Internet search companies such as Yahoo and Google.

For more on the automotive navigation market, read Robinson's new report, entitled: Next-Generation Navigation: Isolated Devices Get Connected. Journalists, please respond to
this e-mail for a free press copy of this report.

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