GPS makers look to in-car navigation for respite

Global positioning system (GPS) device makers are collaborating with automakers to provide in-car navigation features as an alternative growth avenue even as the standalone GPS market continues to shrink. The jury is out on whether the dedicated GPS device will eventually die out, though.

Patrick Connolly, senior analyst at ABI Research, said there is a "major evolution" taking place currently in the in-car navigation space, driven by the dropping sales of personal navigation devices (PNDs) and the growing use of smartphone for navigation purposes.

On the one hand, carmakers are looking at various ways to bring connectivity and infotainment, which includes navigation, to a larger proportion of the addressable market, noted Connolly. For example, Mercedes is pushing for its cloud-based apps store while Ford is promoting a smartphone app running on iOS and Android which connects to its in-car navigation system, he pointed out.

"As a result, factory-fitted, in-dash navigation systems are forecast to treble from 12.2 million in 2011, to over 30 million in 2017," he said. These systems will include not only navigation, but a wealth of new services, features and analytics, he added.

On the other end of the spectrum, PND manufacturers such as Garmin and TomTom recognize the shift in industry impetus and are looking to capitalize on the growth of in-car navigation features.

Johan-Till Broer, media relations specialist at Garmin International, said it has in-dash navigation partnerships with various car manufacturers such as BMW, Chrysler, Honda, Kenwood, Panasonic, Suzuki and Toyota. The company also offers fully integrated infotainment systems for automobiles, he noted.

TomTom, too, provides in-car navigation for Mazda's CX-5 model as it looks to widen its product portfolio, pointed out Chris Kearney, vice president of TomTom Asia-Pacific.

Beyond automobiles, the company also offers its GPS technology to sports companies such as Nike's SportWatch GPS watch, as well as maps to phonemakers and online brands globally, Kearney added.

Standalone GPS still has value
However as demand for in-dash navigation systems rise, the opposite is true for standalone PNDs. Connolly said the sales forecast for standalone GPS systems in cars has dropped to below 30 million in 2012--a first in the past four years. He attributed this decline to competition from smartphones.

"The lack of innovation in PNDs means there is little to distinguish a free smartphone app from a US$100 and above personal navigation device for the casual user," the analyst added.

That said, the PND market decline does not signal the end of standalone GPS devices. "The jury is still out on whether personal navigation devices will disappear altogether," said Connolly.

Emerging markets will present an opportunity to sustain the market, even though the rate of decline in Western markets will be "significant" over the next few years if consumers there do not replace their devices, he added.

Quizzed on this, Kearney said TomTom has seen a "healthy growth" of PNDs in Asia-Pacific although he did not share specific figures. The uptake of its GPS app on mobile phones has also been strong, and some consumers have chosen to use both platforms, he noted.

The executive also pointed out the benefits of such standalone GPS devices. "Dedicated GPS personal navigation devices are designed specifically for navigation and, as such, offer a superior overall routing solution," he said.

By contrast, smartphones must perform multiple tasks and its functionalities are limited by the screen size, battery life and data roaming charges, he added.

Broer said today's market consists of different navigation products including smartphone apps, personal navigation devices as well as integrated in-dash systems with each technology having its advantages and limitations.

"Smartphone apps can be great for pedestrian navigation or occasional use while driving, especially when travelling, but personal navigation devices and in-dash technology still offer a superior experience behind the wheel with larger screens, better audio and no distractions from incoming updates or messages on a smartphone," he explained.