Revenues from portable navigation systems such as personal navigation devices (PNDs) and software for multi-user devices are predicted to exceed €8.3bn in western Europe by 2012.
Juniper Research says PNDs have been one of the great consumer electronics success stories of the past two years, with product ranges from suppliers like Tom Tom, Garmin and Navini reporting revenue growth of 89pc for the financial year 2006.
Also Nokia, which has GPS capabilities in its 6110 and N95 devices, gave the strongest signal of intent by acquiring Navteq in recent months for €5.7bn.
Revenues from PNDs are currently estimated to account for over 90pc of the portable navigation market in western Europe, with other navigation solutions losing market share in the face of the PND onslaught in recent years.
“PND sales in Europe are booming at the moment, but it can’t last forever,” commented report author, Bruce Gibson.
There are already signs of growing maturity in the earliest developed European markets, prices are continuing to fall and there is strong competition from original equipment in-vehicle navigation solutions and from software solutions for multipurpose devices, particularly mobile phones.”
Reasons for consumers buying PNDs include the increasing congestion on European roads that has brought products aimed at congestion avoidance to the fore.
As well as this, GPS device prices have plummeted in recent years, as sales volumes have increased. TomTom, the market leader in Europe, reports average selling price for PNDs as dropping from €464 in 2004 to €270 in 2006.
Fuelled by increasing demand, product capability has improved over the last three years making hitherto top-end features commonplace and shifting sat nav devices from ‘nice to have’ to ‘must-have’ for many regular drivers. In western Europe, Juniper Research expects the percentage of vehicles using PNDs to grow to 22pc by 2012.
Another factor is peer pressure. The domino effect and the realisation that someone else has something which is really useful is proving to be a powerful purchasing incentive.
Convergence in consumer electronics product – progress towards the ubiquitous personal entertainment and communications device is also continuing, as manufacturers produce devices capable of running a wide range of applications with increasingly acceptable performance in all areas.
For example, Nokia’s N95 multimedia device comes with sat nav plus multimedia entertainment capabilities.
By John Kennedy