Global companies that require worldwide navigation coverage for business operations may find China's Beidou Navigation Satellite System (BDS) inadequate since it only covers Asia-Pacific, while the Chinese government's involvement with its development will also dampen enthusiasm among certain industries.
However, the importance of the Chinese market for smartphone and global navigation satellite system manufacturers means adoption for BDS will gain traction in the coming days, according to industry watchers.
Amit Kumar, lead analyst at Technavio, said companies, even Chinese ones, that need to operate globally may not adopt Beidou navigation system as its service is currently limited to the Asia-Pacific region, but opt for one with global coverage such as the U.S.-controlled global positioning system (GPS).
"For instance, a Chinese airline operator would require a navigational service for its global routes and not just for China or the Asia-Pacific region," Kumar said.
He added the involvement of the Chinese government and military in developing and launching of the satellite system may adversely impact adoption, as companies may be wary of how BDS may contravene other countries' national security regulations.
"There are already a number of instances of some countries questioning the credibility of Chinese companies involved in the telecom infrastructure business, and many of them have stopped taking their services," the analyst said, noting this could happen with BDS adoption too.
China's Beidou satellite navigation service was open for public use in Asia-Pacific as of December 2012. It was previously limited to use in China, particularly by the local government and military. Chinese officials had revealed in 2011 it planned to have over 30 satellites in the orbit by 2020 to provide global coverage for free.
Widespread adoption inevitable
Patrick Connolly, senior analyst at ABI Research, believed, however, that the importance of the Chinese market for smartphone makers and global navigation satellite system manufacturers, particularly those in the personal navigation devices (PND) and automotive industries, means support for BDS is a matter of time.
Connolly added that "some form of mandate" or government regulation will "force the hands" of these manufacturers to include the navigation system into existing and future products, thus supporting BDS will be a necessary design trend for all PND integrated circuit (IC) makers and original equipment manufacturers (OEMs) in the next two years.
Such mandates are already beginning to appear, as China's Ministry of Transport on Monday issued new rules requiring commercial vehicles in nine regions to be installed with BDS or their owners will face having their vehicle permits revoked.
Supporting multiple navigational systems
Asked if manufacturers will choose to develop Beidou-only devices, Connolly said most major IC vendors will design chips for the different navigation systems, including GPS, Russia-backed Glonass and Europe's Galileo.
"In truth, at a global level, the inclusion of Beidou will offer diminishing returns in terms of performance for consumer applications," he said, but reiterated that support for BDS is needed to meet future regulations.
He added that chipmakers such as MediaTek, Qualcomm and Broadcom are already working on products that include the different satellite navigation platforms.