Will Smart Phones Crush the Stand-Alone GPS Market?

The days of the stand-alone portable navigation device market are numbered.

By 2014, according to research firm iSuppli, the market for PNDs will be eclipsed by GPS-equipped smart phones. In 2009, the firm says, there will be 114 million PNDs in use, compared to 57.8 million smart phones. But by 2014, the numbers will flip: 305 million smart phones will be in use, versus 128 million PNDs, according to a forecast by iSuppli.

In a statement, iSuppli analyst Danny Kim notes that smart phones were not previously seen as a threat to the PND market due to poor phone battery life, unclear pricing structure and inferior interface design. But he says that as the smart-phone market evolves, those issues are being resolved. New smart phones, he says, offer better GPS integration, better usability, larger screens, built-in connectivity - and new GPS-enabled applications. (He counts 8 GPS applications for the Apple (AAPL) iPhone alone.) By 2011, Kim believes, almost every smart phone will include GPS functionality.

And here’s a sobering thought for investors in the space: iSuppliu thinks that from 2009 to 2013, the number of TomTom (TMOAF.PK) and Garmin (GRMN) PNDs in use is not likely to change significantly. “The year 2009 marks the dividing line when sales expansion for the PND slows as the product moves from the growth phase to the maturity stage of its life cycle,” iSuppli contends.

Original post

Comments

[Philly Jim:]

No way! Cell phone batteries are junk right now. When/if, the Chinese begin to innovate, instead of photocopying everything the West does, we may get a cell phone battery that can make using the smart phone for GPS, more realistic.

Sep 01 05:36 PM

[rughetta:]

Presently, many smartphones employ GPS chips but many do not. Some use differential signal reception times at multiple cell antennas to triangulate position. Either way, the vast majority of smartphones do not have sufficient memory to contain the map data and therefore are reliant on sending coordinates back to the service provider then receiving position data from the service provider to display. Note that this requires a lot of power to maintain the two-way communication during the entire time that the GPS function is used. Furthermore, GPS function is unavailable where there is no reception. This precludes the use of smartphone-based GPS location in sparsely populated areas, mountainous areas, and any other area where reception is poor. Even if enough memory to carry map software were available in a smartphone, the service providers may be reluctant to relinquish the ~$10/mo service charge they garner for providing the GPS service to their customers. Thus, providing a disincentive for cell service providers to sign contracts with smartphone manufacturers that want to market products with stand-alone GPS capability. These problems are circumvented with a PND since thy have plenty of memory and there is no need of a service contract or constant two-way communication for the GPS function to work. At the present time, only Garmin (Nuviphone), Apple (i-phone with GPS app), RIM (Blackberry with Garmin software), and maybe a few others with special software are the only smartphones that have stand-alone GPS functionality. Because the Garmin was designed as a PND with smartphone capabilities, its GPS function is by far th easiest to use and most bug-free. Time will start to change these things as GPS alone will not be nough but will start to give way to other location-based services (LBS) such as location-sensitive advertising, peer-to-peer mapping, real-time traffic routing, etc. This will start requiring PNDs to evolve into internet-connected devices that will start to resemble cell phones but coming from the other direction. Eventually, all cell phones will have stand-alone GPS function (thus saving battery power) and the service providers will get their revenue from the LBS market.

Just my take on the fuzzy image in my crystal ball.

Rughetta

Sep 02 09:14 AM

[BASEXXXX:]

Why is battery life even an issue? I almost never use my car GPS unit unless it's plugged in. I know not all GPS's are car GPS's but aren't the vast majority? Why can't the mount in your car actually charge the phone while you're using it's GPS functionality. Get to your destination and unmount your phone and take it with you....battery more charged than when you got into your car.


On Sep 01 05:36 PM Philly Jim wrote:

> No way! Cell phone batteries are junk right now. When/if, the Chinese
> begin to innovate, instead of photocopying everything the West does,
> we may get a cell phone battery that can make using the smart phone
> for GPS, more realistic.

Sep 08 10:03 PM