Mobile Phones Threaten Dedicated Portable GPS Market

location based services

Christine Persaud
The portable GPS market has been enjoying phenomenal growth over the past year: the NPD Group reported in February that sales grew a massive 453 per cent in dollars and 923 per cent in units in 2006 in Canada; and 128 per cent to over US$476 million south of the border. However, high-tech research firm In-Stat says that, as navigation features become more common on mobile handsets, this category will threaten the continuing success of dedicated GPS units.
“For approximately US$10 per month, handset navigation offers similar, if not superior, functionality to Personal Navigation Devices (PNDs), at a lower price,” said the firm.
The obvious benefit portable units have over built-in vehicle systems is that they are easily transportable from car to car, and can even be used on-foot via their rechargeable, internal batteries. Mobile phones can offer these very same benefits without the person having to bring along a second gadget. According to In-Stat Analyst Stephanie Ethier, these benefits provide wireless service providers with an opportunity to capture market share from portable GPS manufacturers.
Mobile phones have a long way to go before they can compete with dedicates devices, whether it be portable GPS units, entry-level digital cameras, or portable audio/video players. But in future, we could very well see one, portable convergence device that “does it all”.
On the flip side, one multifunctional device could pose problems. What if you want to chat on the phone at the same time that you’re navigating on foot? The issue gets even more complicated when you add music and picture taking to the mix: would a person want to be restricted to only being able to perform one function at a time?
Nevertheless, in the near term, In-Stat says that the market for portable GPS devices will remain healthy, reaching 56 million units worldwide by 2011, up from 14 million in 2006. This will be due, in large part, to falling prices (entry-level models are now available for well under $200), enhanced features, stronger consumer awareness, and increased marketing and promotion. As for mobile phone navigation, customers are likely still warming up to the feature.
The report, entitled Personal Navigation Devices: Worldwide Shipment Growth to Slow as Handset Navigation Arrives, includes forecasts for unit shipments, average sales prices, and revenue through 2011. It also includes results from a large-scale survey of consumer attitudes toward portable GPS units and mobile handset navigation applications.

Published: 6/25/2007 5:31:45