Abstract
Executive summary
Introduction
The navigation industry has seen tremendous growth in the last five years.
This growth was expected to continue over the coming years, but the collapse
of the global economy has brought everything to a standstill. Currently, the
automotive industry is very unstable and this is having a direct effect on the
navigation sector. This report analyses the recent trends within the
navigation industry, how the market is likely to evolve during the recession
and what vehicle manufacturers should be prepared for when the market finally
starts to pick up.
Summary of conclusions
SBD expects the embedded navigation segment to be affected the most in 2009,
with a decrease of over 35% in year-on-year sales. Whilst car sales are
expected to decrease further in 2010, SBD believes the increasing fitment of
new low-cost navigation systems on mass market vehicles will act as a buffer
and prevent the embedded navigation market from declining further. The PND
market has also been significantly affected by the recession, but it is still
expected to grow by around 4 to 6% year-on-year for the next 3 years with
sales coming mainly from low-cost entry level devices. The Smartphone
navigation sector is changing rapidly with new entrants including Apple and
Google. Whilst the recession has shrunk the overall mobile phone market, the
proportion of GPS-enabled Smartphones is increasing and is expected to cross
35 million units by 2011. However, over 90% of these will be optimised for
locationbased services only and not for in-car navigation. Overall, there is a
big hype around connected services in the navigation industry at present.
Whilst some of these services currently lack a profitable business model, SBD
believes that they will play a key role in 2 to 3 years' time. Hence it is
important that vehicle manufacturers follow the example of the Smartphone &
PND industries and start investigating connected services in order to
successfully meet future consumer needs.
The impact of the recession on market growth
As all the major international markets head towards recession, every industry
has been affected in one way or the other. The navigation sectors (embedded,
PND and Smartphones) were expected to see a steady growth over the next 5
years, but this has now been affected as consumers cut back on expenditure.
SBD' s forecasts of how the navigation markets are set to evolve during the
recession are shown in the next 3 pages.
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