GPS World - January 2008 - (Page 58)

BUSINESS OUTLOOK | Mass Market OEM The Manufacturer’s Road I n a relatively short time, the current consumer markets have enlarged to the point that almost 10 percent of U.S. households now own some personal navigation device. Let’s take a look at how the market has evolved and the drivers that will influence development in 2008. The Wayback Machine. The date is 1990, a year that fielded the first fiveyear study of the potential of GPS and only one year after a fledging GPS World magazine was born. No great banners proclaimed that this technology would become the hottest Christmas gift of 2007, nor that it even had a bright future. The satellite constellation was still incomplete, coverage limited, and applications still forming in the minds of developers and manufacturers. Selective Availability (SA) promoting location-based social networking. The advent of smartphones (networkindependent) takes location-based services (LBS to another level and attracts large enterprise and small-to-medium business interest. What will we see in 2008 massmarket applications? PND Segment. PND sales will continue to increase through 2008, as lowerpriced units continue to push consumer sales. Expect to see more offshore imports as Taiwan and China get their factories in motion and target the space. Tagging along after the expensive marketing efforts of companies like TomTom, Garmin, and Magellan who have educated consumers, the offshore companies will focus on secondary marketing channels. They will gain some ground in attracting tier-one WE SEE SIZZLING consumer purchasing OEM INSIGHTS with Stephen Colwell and wireless carriers promoting locationbased social networking. The advent of smartphones takes LBS to another level and attracts large and small-to-medium business interest. What will we see in 2008 mass-market applications? STEPHEN COLWELL writes the monthly MASS MARKET OEM e-mail newsletter. Subscriptions are available free at www.gpsworld.com. This article presents an abridged version of his most recent column. degraded commercial accuracy to around 100 meters. All advocates of commercial use agreed this would severely limit the technology in consumer markets. Workarounds were found with the advent of dual-frequency receivers — definitely not a mass-market commodity — where with post processing one could obtain centimeter positioning, but not in real time. In 2000 SA was turned off, the cat was out of the bag, and the march towards the consumer market began. Fast-forward to 2007, the hottest year ever for GPS-enabled navigation devices. We see sizzling consumer purchasing, heavy commitments in the construction and GIS markets, and wireless carriers 58 GPS World | January 2008 distributors due to the high profit margins they will offer to gain branding and market share. The big three mentioned above will continue to add features such as traffic content, pedestrian navigation, and cellular options such as text and voice integration to their already popular lines. They are also moving quickly to develop and expand unique applications in niche markets that will focus on activities such as fleet management and enterprise applications. Carrier-Based Nav. Carriers will look to grow their user base for navigation services. Social Networking (Web 2.0) holds the promise of luring teens and young adults to develop networks where they can connect with friends and use location to map people and activities. Carriers will continue to develop location-advertising programs as they see new revenue streams with their large share of the connected phone space. Sprint already focuses on enterprise businesses, providing programs that use LBS for markets such as home healthcare and real-estate professionals. Expect to see prices of current carrierbased navigation services, which typically run around $10 per month, drop to lower levels as carriers feel the pressure of smartphones, which are unlocked and may contain their own navigation software that can be employed at no additional cost to the user. Carrier efforts to bundle only those applications they select and charge the user for is quickly coming under fire. Verizon recently announced it would allow users to download third-party applications; this will become the new model for carriers. 2008 presents plenty of headaches for carriers as they seek their way through a maze of potential of LBS opportunities. SmartPhones. RIM Blackberry carries the standard for this brigade, hosting GPS and LBS applications, and is second only to standalone PNDs in growth rates. This has the PND industry very concerned. Smartphones do it all. A smartphone can connect to Wi-Fi, Wi-Max, and Bluetooth, and has a powerful operating platform that can serve up e-mail, other services, and hold a tremendous amount of memory and graphics. Combine that with a display that is equal to or larger than current PNDs and you have a converged all-in-one device versus spending money on separate platforms. Although the big three PND manufacturers are comfortable taking on current competition, they have never before faced the threat in their personal space from such powerhouses as Nokia, Hewlett Packard, Google, RIM, Palm, or Microsoft. I see smartphone manufacturers driving a stake in the ground in ’08, with consumers and (Continued on page 60) www.gpsworld.com http://www.gpsworld.com http://www.gpsworld.com

Table of Contents Feed for the Digital Edition of GPS World - January 2008

GPS - January 2008 Contents Out in Front Expert Advice The Money-Go-Round u-Nav Latest Acquisition Apples to Apples Global SBAS 2008 GPS Receiver Survey Advertisers Index & Company Directory The Manufacturer's Road Year of the Who Working Indoor Up and Down Good, Better, Best Marketplace Classifieds Seen + Heard

GPS World - January 2008

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