Welcome to New Directions!

As anyone who is following our company knows, Columbus Geographic Systems has been growing steadily for the past year. There are many new and exciting things happening in our business almost daily and we intend to use our new monthly newsletter to highlight items of special interest to you, our valued stakeholders.

There are a lot of interesting things happening in our industry right now. According to analysts we are on course for extraordinary sales growth over the next two years. While industry research shows that right now, Japan is the number one market for personal navigation devices, IQ Online recently stated that, according to Juniper Research, sales of portable navigation solutions in Western Europe will exceed €8.3 billion ($12 billion) by 2012.  As products become more affordable and capabilities expand, and roads become more congested, there will be greater demand.

Columbus is committed to becoming an important player in this market and we encourage you to join us as we navigate our course to success.

The October 4^th edition of The Economist says that approximately 35 million personal navigation devices will be sold worldwide this year --twice as many as in 2006. This means that personal navigation is one of the fastest-growing areas in the consumer electronics sector. The industry is beginning to focus on the services PNDs could provide in the future.

Proof of this shift came in July, TomTom, a leading PND vendor from the Netherlands, announced plans to buy Tele Atlas, one of the largest digital mapmakers, for €1.8 billion. Then, on October 1st, Nokia, the world's largest mobile-phone maker, said that it would acquire Navteq, the world's largest digital map maker, for €5.7 billion ($8.1 billion) in cash.

While product mark-ups are presently near the 50% mark, there are many new players entering the market and this will inevitably increase competition and lower prices. Prices for PNDs have already dropped, from around $630 on average in 2005, to $400 now.

Still, most of the innovation is now occurring in supplementary services rather than in basic navigation system. Drivers in the Netherlands and Britain, for instance, will soon be able to subscribe to real-time traffic information that will allow their PNDs to steer around traffic jams.

Towards the end of October, Columbus announced that the US Agency for International Development (USAID) had purchased the company's SmartView product to provide advanced geographic information systems (GIS) for their people in the field. USAID extends assistance to countries recovering from disasters and other challenges. USAID is currently operating in more than 100 countries and SmartView will give the agency critical capabilities for a range of advanced GIS analysis of agricultural land and more efficient management of tenders for land distribution projects. SmartView is a powerful geographical data management software, designed for ease-of-us with maps in a wide range of formats and scales. The software enables users to quickly locate and map points of interest for further analysis.

Columbus and global communications leader, Motorola, have agreed to conduct a pilot project providing navigation and location-based information to drivers and hikers. This information will be relayed to end users through voice messaging or SMSs to cellular phones or in-car PC systems.

The Motorola Call Center subsidiary that will participate in the pilot project will use Columbus' system to provide real-time navigation and location-based tourist information to end users. If the test proves successful, users will be able to receive a wide range of tourist information – from recommended entertainment to restaurants and hotels from their personal navigation devices.

Another area of strong growth is the market for in-car navigation systems. According to Frost & Sullivan Research Analysts Praveen Chandrasekhar and Franck Leveque, "Navigation systems have become increasingly affordable and are now the target of consumer electronics enthusiasts who view the automotive market as an untapped opportunity. Convenience, efficiency and the need to avoid using paper maps seem to be driving interest in navigation systems."