GPS Mobile Phone Shipments in China to Increase Tenfold by 2011

location based services

Jul 11, 2007 21:07Yukiko Kanoh, Nikkei Electronics
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iSuppli Corp. of the United States has reported that demand for navigation services is rising among Chinese consumers, and mobile phone carriers expect such services to play an important role in slowing down the drop of ARPU (average monthly revenue per unit) in the future.
Chinese GPS mobile phone shipments are likely to reach 1.4 million units in 2007. iSuppli forecast GPS mobile phone shipments in the Chinese market will reach 16.5 million units in 2011, more than ten times the shipments in 2007, reflecting lower average selling price (ASP) of such handsets.
Both China Mobile Ltd. and China Unicom Ltd., mobile phone carriers of China, started their navigation services in 2007. Current monthly rate for the navigation services is $2.5 (USD) at 5 MB bandwidth.
Unlike portable navigation devices (PND), GPS mobile phones receive map data via mobile networks. Therefore, the handsets do not need built-in map data but just navigation software.
Users can also have full map data installed in GPS mobile phones as an optional feature. According to iSuppli, Beijing-based Lingtu Software Technology Co. Ltd., Shenzhen-based Careland information System Co. Ltd. and Beijing-based Guantu Information Technology Co. Ltd. are major map data manufacturers in the Chinese market.
iSuppli's analysis indicated the diffusion of GPS mobile phones had been strongly hindered by their high retail prices. As of the end of 2006, products featuring GPS capability were primarily high-end smart phones that cost over $700.
GPS mobile phones sold in 2006 included MiTAC Inc.'s "Mio A701" from Taiwan and Dopod China Corp's "P800."
Chinese domestic OEM manufacturers have proactively entered the market as well. Amoi Electronics Co. Ltd. of China, for example, released the "E860" featuring GPS capability in February 2007.
This model incorporates a GPS chipset from SiRF Technology Inc. of the United States, an application processor from Intel Corp. and GPS software from Lingtu Software Technology. It supports Microsoft Corp.'s "Windows Mobile 5.0" OS.
Pricing for the E860 is reasonable $450, which helped the product sell most among GPS mobile phones in May.
In addition, Chinese mobile phone manufacturers consider adopting GPS capability to high-end models. Such handsets are embedded with a GPS module and a multimedia processor, yet pricing at $250 is possible if they are not mounted with an application processor and an OS, according to iSuppli.
iSuppli forecast the demand for GPS chipsets, multimedia processors and other IC chips will improve in accordance with increased GPS mobile phone shipments. The company also predicted pricing for GPS chipsets will drop rapidly in the first half of 2008, reflecting intensified competition due to Taiwanese fabless manufacturers' entry to the market.
The cost of a GPS mobile phone will continue to decline throughout 2007 resulting from competition among multimedia processor manufacturers of Taiwan, Korea and China, iSuppli added.