Friday, November 26, 2010

Are Smartphones Stealing All GPS Sales?

smartphones stealing gps sales
For years researchers have been saying that the developments and advancements of smartphones would cause GPS systems to become obsolete, but until recently smartphones did not seem like a legitimate threat.

The Swedish research company Berg Insight says that it believes that PND (personal navigation device) sales will peak at 42 million units by next year and then slowly phase out due to the increase in GPS-enabled smartphones in the years to come.

Smartphone-enabled GPS systems are so much more convenient when they are compared to a separate device that you have to lug around everywhere with you like a GPS system.
The numbers concerning the decline of GPS systems are a sharp contrast from the numbers just a few years ago that showed several hundred dollar GPS systems including Garmins, TomToms, and Magellans that made the very top of some people’s Christmas lists.

To pinpoint the decline of the want or need for a GPS system, you must consider the launch of Android in October 2008. When this occurred, subscribers were provided with Google Maps and navigation programs for free. In February Nokia followed suit by providing their users with Ovi Maps, a-turn-by-turn navigation software. Berg reported that compared to the same time last year, in the first half of 2010, the use of navigation services of mobile devices grew by 57 percent.

“The technology is being partially absorbed into smartphones and in-dash devices,” said Kevin Rauckman, the Garmin chief financial officer. Despite the decline in the purchase and use of GPS systems, navigation companies are still putting up a fight. “We are also seeing the industry mature very rapidly. But that in no way means the end of the road for our business,” said Rauckman. The companies are adding features to their GPS systems like much more accurate maps, bigger screen sizes, and specific data points locating things such as sex offenders or speed cameras. They are also “fortifying” their apps so that they can directly compete with devices and services like iPhone, Android, and Symbian.

“There is no doubt that the smartphone is transforming many of these markets, not just navigation devices, but cameras and media players, too,” Andre Malm, a senior analyst at Berg Insight said. “These markets aren’t going to disappear, but they are going to change substantially.”

In spite of the figures that Berg Insight has predicted, they say that they don’t see GPS systems as devices that will completely die off. In a press release Berg said that in the years to come it is likely that most North American and European customers will own more than one device capable of taking care of navigation needs.

Malm said, “Vendors need to communicate the advantages of connected services, such as better traffic information, in order to educate potential customers and stimulate demand.”

I have begun to see the use of GPS systems decline quite a bit lately, but I agree with Berg Insight on the prediction that the devices will not completely disappear. Some people like the size of GPS systems, and others like having an actual device in their car that is specifically utilized for navigation purposes. Although the younger generation may not be interested in GPS systems and would prefer to use their smartphone, many people in older generations may prefer the various advantages and simplicity of a GPS system.

We’ll just have to see how GPS systems do in the future, and if smartphones really will take over the GPS market.

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