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| Investor Information > Market analysis |
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Market analysis |
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There is increased market awareness of the advantages of using navigation and GPS tools, According to one industry report , the GPS market will continue to grow, reaching $28.9 billion by 2010. Prices of GPS chipsets are falling, in turn boosting market adoption of GPS-based products. The analysts say that Japan is the world's largest market for GPS technology, followed by the US and Europe. The European market for GPS is expected to record the fastest growth, with a compound annual growth rate of about 17%. Developing regions, such as Asia Pacific, are also expected to emerge as a growth market because of increasing technology penetration.
The E911 mandate (for mobile phones to report their position accurately) in the US, together with latest technological advancements in GPS and mobile handset technology, has cleared the way for large-scale adoption of GPS technology in mobile telephony. The analysts conclude that the application of the technology in mobile phones is likely to generate further opportunities for suppliers of GPS solutions.
Consumers have been quick to appreciate the attractiveness of vehicle navigation systems. This includes built-in systems and Personal Navigation Devices (PNDs), which are handheld devices users can carry with them, as well as use in their vehicles. According to a leading industry source , in 2006, more than a decade after the products began hitting the market, year-on-year volume growth exceeded 50%. In all, approximately 4 million vehicle navigation systems were sold in North America last year and approximately 13 million in Europe. According to this report, the market is still under-penetrated, with less than one in ten cars in North America and Western Europe having some kind of navigation system, and in 2006 only about one in nine new cars arrived at the dealership with in-dash navigation systems. In all, they estimate that in the beginning of 2007, only 7% of the addressable North American and Western European markets had been penetrated.
The same analysts estimate that unit volumes for PNDs will expand at a cumulative annual growth rate (CAGR) of approximately 31% for the next five years and grow to approximately 56 million units in 2011 from approximately 14 million units in 2006. In dollar terms, they expect the PND market to grow at annual pace of 21% over the next five years, to approximately $12 billion in 2011 from approximately $4.5 billion in 2006.
This strong demand for navigation systems will drive growth for all market players, including the software which is the cornerstone of every navigation system.
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