Personal navigation devices 'explode' in the auto market location based services
Rick DeMeis
Automotive DesignLine (06/14/2007 5:22 PM EDT)
Despite the low "take rate" for automotive-OEM-supplied embedded navigation systems, car buyers' appetites for car navigation has become voracious, and will cause worldwide shipments of "hand-held" personal navigation devices (PNDs) to more than triple from 2006 to 2012. That's the prediction of iSuppli in a just released report, "Portable Navigation Devices Drive Semiconductor Growth." According to another recent study on the 6.8% growth last year in the overall automotive semiconductor market, OEM original equipment embedded navigation systems will still be a "slow grower," according to Strategy Analytics Chris Webber, VP for global automotive. But because of the high cost of OEM navigation systems (often bundled with options consumers may not want), the market for personal nav devices for in-car use is taking off. Since 2001, the automotive navigation market has transformed from being dominated by embedded systems installed in cars to being taken over by PNDs that can also be used in cars. The raised awareness of navigation is now having an uplifting effect on all types of systems, including line-fit units, with iSuppli forecasting total market shipments of 65.1 million navigation systems by 2012, more than three times the 19.8 million shipped in 2006. "The rise in popularity of PNDs has encouraged the two leaders in this market, Tom-Tom and Garmin, to expand their business. These companies now are two of the fastest-growing semiconductor buyers in the world," says Richard Robinson, principal analyst for automotive electronics at iSuppli. "Given that the handheld navigation market is still at such an early stage of development, this is an amazing feat." Tom-Tom and Garmin have experienced dramatic revenue growth during the past four years, rising to billion-dollar companies in 2006. Tom-Tom in particular grew to nearly $1.6 billion in revenue in 2006, up from just a mere $10 million in 2002. However, competition is heating up as other companies have caught onto the fact that GPS systems are booming. With the market for navigation devices forecast to continue to soar, the leading companies are finding they need to do a little navigating themselves, as an estimated 100 Original Design Manufacturers (ODMs) from Taiwan and Korea are entering the market to take advantage of the brisk sales growth. Currently, the biggest threat to the dominant suppliers comes from Taiwanese ODM MiTAC, which owns the Mio brand and recently purchased the Navman brand. According to iSuppli's latest market share data, Mio and Navman together captured 20% of the market in 2006, putting MiTAC in the No. 3 spot, behind Tom-Tom and Garmin. Tom-Tom and Garmin posted 37% and 25% market shares, respectively. For more on automotive navigation systems, read: Keep automotive navigation data up-to-date Related Links: