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Way to go

Wednesday, 12 March 2008

Global mobile navigation device shipments hit 39 million in 2007…

Not only does growth in the GPS navigation industry show no signs of slowing, it is actually increasing according to the latest figures from analyst firm Canalys. Year-on-year growth in mobile GPS navigation device shipments stood at 148% worldwide in Q4 2007, the highest seen since Q1 2006. Again, despite all the recent activity in the Smartphone segment of the market - which is the fastest growing according to Canalys - shipments of dedicated portable navigation devices (PNDs) were up 150% year-on-year in Q4 and represented a stable 90% of total device shipments.

“A big factor in the continued success of the PND is the US market,” offers Chris Jones, Canalys vp and principal analyst. “Seasonal promotions – particularly around Black Friday and the Thanksgiving weekend – drove huge volumes. These promotions saw PNDs drop, albeit temporarily, to price points as low as US$80. Garmin, Magellan, Mio, Navigon, TomTom, and others, had products selling at substantial discounts. While it is good to get the volume, the problem this creates is it gives US consumers the idea that satellite navigation needn’t be very expensive, and predictably, many price points have not sprung back to their pre-discount levels.”

Canalys estimates that around 6.7mn PNDs shipped in the US in Q4 2007, representing 55% of the total for the year. In Q4 2006 the figure was below 1.5mn, showing just how much the market has grown and the extent to which the US, once tiny compared to the European market for such devices, has become a major arena for the many competitors in this industry.

“Many vendors are finding it difficult to compete profitably given the rapid price and margin reductions we have seen in the market in recent quarters,” adds research analyst Tim Shepherd. “Cobra, for example, announced its departure at the end of 2007, and there are many smaller vendors suffering as the market leaders increase their shares.”

With year-on-year growth of 86% in Q4 2007, EMEA is a laggard in comparison to the other regions of the world, but Canalys reckons few industries can boast such tremendous, sustained performance as has been seen in the navigation business there for the past few years. In Q4, half of all mobile GPS navigation device shipments worldwide were in EMEA. A year earlier EMEA was two-thirds of the global total, but it remains a highly lucrative market for many vendors. The top four only hold 65% of the market – a situation that has changed little over the past few quarters. TomTom held onto its clear lead in Q4, with 32% share, ahead of Garmin on 17% and Nokia on 11% thanks to the success of its growing portfolio of Symbian Smartphones with integrated GPS. Mio and Navman took the fourth and fifth spots.

“Within EMEA, the vast majority of shipments are still in Western Europe, but Central and Eastern Europe is enjoying tremendous growth – shipments there in 2007 more than quadrupled from 2006, reaching 1.4 million units,” says Jones.

The new found importance of the USA to the GPS navigation market is echoed in a recent analysis published by electronics value chain market intelligence company iSuppli. This company estimates that global shipments of mobile handsets equipped with GPS capability are expected to more than quadruple from 2006 to 2011 due to the US government’s mandate for Emergency 911 (E911) capability as well as wireless operators’ initiatives to offer Location-Based Services (LBSs).

According to iSuppli GPS-equipped mobile handset shipments will increase to 444mn units by 2011, rising from 109.6mn units in 2006. By 2011, the company says, 29.6% percent of all mobile phones shipped will have GPS capability, up from 11.1% in 2006.

“Besides cameras, multimedia capabilities and connectivity solutions, mobile-handset OEMs increasingly are investigating the integration of GPS functionality in mobile devices as a value-added product differentiator,” comments Tina Teng, analyst, wireless communications at iSuppli. “Wireless carriers are looking at introducing various new GPS-based, revenue-generating services to increase average revenue per user (ARPU).”
John Williamson