Thursday, June 01, 2006

The easy ride for navigation products is over.

location based services

According to a report from Strategy Analytics, cellular phone companies and traditional automotive system suppliers are now well-positioned to present a serious competitive response to the low-cost, well-branded navigation products from TomTom, Garmin, Magellan and others. Indeed, the firm predicted that cell phones will take a 30 percent slice of 88 million unit navigation market by 2010.
In the report, "Portable Navigation: Vendors Face Consolidation and Automotive Fightback," the firm concludes that investment and competitive pressures are also expected to drive consolidation among portable navigation vendors in the next 12 months.
"There are now indications that portable navigation device (PND) growth is slowing, and the demand from the smaller but highly significant segment of consumers who require route guidance on a regular basis has practically been met by low-cost PNDs," said Joanne Blight, director of the firm’s automotive practice, in a statement.
Strategy Analytics noted that its Q4 2005 survey of new car buyers across the United States and Europe indicated that at least 18 percent of drivers require maps or directions more than 20 percent of the time. The vast majority of consumers, however, more than 60 percent according to the data, only spend 5 percent of their travel time going beyond familiar destinations.
"The next challenge is to meet the needs of the much larger consumer segment who require route guidance on a far less regular basis,” Blight continued. “These consumers will require products that combine and integrate navigation with a range of other features, starting with road traffic information, but increasingly requiring entertainment and innovative location-based applications. The automotive and wireless companies are very well positioned to mount some serious competition in this section of the navigation market."

Article Letter to the Editor

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