Research Overview
Revenue Surge Expected in GPS-based Navigation Systems Due to Economies of
Scale Achieved through Price Reduction
Global positioning system (GPS) navigation products are expected to generate
increased demand from their primary end users ? automakers and vehicle owners ?
especially with a drop in prices. Once this happens, most vehicle segments in
both the original equipment market and aftermarket are likely to rapidly adopt
these systems. In fact, navigation and information delivery systems could become
indispensable vehicle accessories for the marine and outdoor recreation
segments. Currently, technological innovation and higher economies of scale have
already initiated steady price declines. Product bundling and aggressive
cost-cutting strategies in all aspects of operations are expected to alleviate
the price issue further.
This Frost & Sullivan research service analyzes the current state of the
North American automotive and consumer GPS navigation system, looking at drivers
and restraints for growth, pricing, distribution, technology, and demand trends.
The study has been segmented into automotive, marine, and outdoor recreation
navigation systems markets. The study includes competitive structure of the
market, participants market shares, and detailed profiles of key competitors.
Advances in Dynamic Navigation to Aid Deeper Market Penetration
North America has been slower to adopt navigation systems than other parts of
the world because the road networks are relatively well laid out and do not
change names for many miles, thereby making navigation systems redundant.
However, as dynamic navigation and other inventive applications are added,
navigation systems are expected to become increasingly popular. Robust market
growth rates, declining prices, and a steady increase in awareness of the
advantages of GPS present exciting opportunities to market participants.
Incorporation of real-time information systems, advances in data
transmissibility, and continuous innovation in GPS and associated technologies
are expected to provide a launch pad for GPS products into automotive, marine,
and outdoor recreation industries. General Motors has already begun to offer the
dynamic navigation system, XM NavTraffic as an optional feature in select
vehicles. "This device can fully integrate with the vehicles on-board
navigation system to display current information about traffic, average traffic
speed along specific roadways, and estimated travel times based on traffic
conditions," says the analyst of the research.
Enhancing the Performance-Price Ratio to Boost Product Demand
Market participants are focusing on increasing customer awareness of the
value proposition of GPS systems in motor vehicles and non-automotive
applications. They are also aiming to improve the feature/performance-price
ratio through simultaneous technological innovation and advances in real-time
information delivery capabilities. The introduction of hard disc drive (HDD)-based
navigation systems is a move in this direction. This device can store a
preloaded map as well as point of interest database of North America and even
frequently update it.
Apart from eliminating the hassle of carrying, changing, and updating discs,
HDD is also cheaper on a per-megabyte basis than traditional discs. "The
cost efficiency, high storage capacity, and flexibility of HDD technology are
expected to boost the performance-price ratio of navigation systems," notes
the analyst. Meanwhile, integrated infotainment systems that provide improved
performances at low prices also result in enhanced value-price ratio of
navigation systems, thereby increasing their uptake.
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