Portable satnav sales to be hit by phones with GPS

Sales of portable satellite-navigation devices (PNDs) are being hit by the latest wave of GPS-enabled mobile handsets, according to iSuppli.

In 2007, PNDs – accounted for about half of all navigation device shipments, with the remainder divided up among automotive in-dash systems, smart phones and mobile handsets. However, by 2010, the standalone satnav’s share of shipments will decline to 35 per cent and then to 23 per cent in 2013.

“PNDs have flourished in an environment with little competition during the last four years,” said Richard Robinson, principal analyst at iSuppli. “Being less expensive and easier to obtain than in-dash systems, and much easier to use than mobile handsets, PNDs have been the navigation product of choice for global consumers. However, there will be a significant cannibalisation of the PND market by low-cost in-vehicle solutions and wireless handsets in the coming years.”

In 2011, navigation-enabled mobile handsets will grow to account for 36 per cent of total navigation system shipments, for the first time surpassing the as the highest-volume platform. PND shipments will account for only 30 per cent of the total market during that same year due to the fast growth of the other platforms. As a result, the PND market is ending its fast-growth phase and moving into a stage of maturity.

After achieving growth of 123.7 per cent in 2007, global PND unit shipment increases will slow to 43 per cent in 2008 and to 23.5 per cent in 2009. Meanwhile, shipments of navigation-enabled mobile handsets will rise by 91.4 per cent in 2008 and 70.6 per cent in 2009. Shipments of navigation-enabled smart phones will increase by 66 per cent in 2008 and 51.6 per cent in 2009.

“Strong PND price erosion witnessed in 2007 and 2008 will lead to consolidation in the sector in 2008 and 2009, with smaller vendors exiting the market because they will be unable to achieve the volumes and economies of scale needed to operate profitably at these price points,” Robinson said. “The survivors will be those companies that successfully build economies of scale in the supply chain and that achieve reductions in engineering, hardware and silicon costs in order to keep pace with rapidly declining prices,” Robinson said.

The under-penetrated market for in-vehicle navigation continues to be the main growth driver for PND sales. Until now, the traditional tier-one suppliers for automotive electronics companies have dominated the in-dash navigation system market. However, this is expected to change as carmakers seek less costly approaches to vehicle navigation.

“The push by vehicle OEMs to roll out lower-cost in-dash navigation systems will pose a significant threat to the existing tier-one electronics suppliers around 2012, potentially opening up the market to competition from non-traditional OEM hardware and software manufacturers such as Garmin and TomTom, or even handset makers like Nokia and Samsung,” Robinson said.

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