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Internet Telephony: October 21, 2008 eNewsLetter
October 21, 2008

Is the Stand-Alone GPS Market Losing Its Way?

By Jessica Kostek, TMCnet Channel Editor

TomTom (News - Alert), don’t leave us! How are we supposed to navigate our way around without, “Oh wait, where’s my iPhone?” Portable navigation devices (PND) are coming close to being over-the-hill according to experts. Some also say the PND could soon be on the same plot line as the once famous personal digital assistants.



 
Navigation device makers such as Garmin (News - Alert) and TomTom are calculated to have several more years of sales growth in the category, driven mainly by lower prices. But the general consensus for the devices is that they’re obsolete.
 
"This PND space is absolutely going in the crapper," said Jeff Evanson, an analyst at Dougherty & Co.
 
Evanson sees several factors leading to a "dramatic slowdown" in PND sales, including a lack of innovation in PND products for the upcoming holiday season, signs of market saturation and competition for consumer spending.
 
"The days of the PND as a separate device category are numbered," said Michael Davies, a senior lecturer at MIT (News - Alert) Sloan School of Management.
 
The portable navigation device market is being eaten by smart phones and more factory-installed dashboard navigation systems in cars, Davies says.
 
Consumers nowadays have plenty to choose from: Nokia, Palm, Research In Motion and Samsung boast GPS navigation systems. AT&T, Verizon Wireless, Sprint Nextel (News - Alert) and others offer navigation software and services from Networks In Motion and TeleNav.
 
Plus, touch-screen phones, such as Apple's iPhone 3G and T-Mobile's G1 phone with Google's (News - Alert) Android software, promise PND-like functionality on a large display.
 
“Smart phones might not be as good as PNDs in ease of use and some navigation features, but they're good enough for a lot of users,” says Richard Robinson, an analyst at research firm iSuppli. “And consumers prefer having one portable device instead of two,” he says.
 
A few may recall that exact same thing happened to PDAs when the arrival of cellular phones and devices started introducing calendars, notes and to-do list features.
 
“PND makers are trying to improve their devices with real-time traffic, gas prices and other data by adding wireless connectivity. But cell phones have the advantage there because they already have wireless connectivity,” says Harry Wang, an analyst at Parks Associates.
In response to the current trends, Garmin is going to come out with its first GPS-enabled smart phone, the Nuvifone. Originally planned for this year, it has been delayed until 2009.
 
The Nuvifone is looking like a "bomb," Evanson said, ugly and late to market.
 
Analysts expect to see some companies exit the PND business within the next year because of brutal pricing competition and diminished growth prospects.
 
According to Investors.com, Cobra Electronics halted production of mass-market navigation products for North America. And Sony this year quit the PND market in Europe.

Jessica Kostek is a channel editor for TMCnet, covering VoIP, CRM, call center and wireless technologies. To read more of Jessica’s articles, please visit her columnist page.

Edited by Jessica Kostek

(source: http://gadgets.tmcnet.com/topics/gadgets/articles/43433-the-stand-alone-gps-market-losing-its-way.htm)








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