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China Car Navigation Industry Report, 2006-2008
Research In China, Feb 2008, Pages: 154
With the number of cars in China exceeding 40 million units and the application prospect of car navigation products becoming clearer and broader, the competition in China car navigation industry becomes fiercer. GPS equipment manufacturers, navigation software and map manufacturers, navigation operators, and chip manufacturers both in China and foreign countries are vigorously developing their own technology advantages and integrating their upstream and downstream industry chain, so as to expand their market shares and seize market opportunities.
During 2006-2007, GPS equipments and navigation system software & map manufacturers started a tide of merger, acquisition and integration. Several new trends are shown in the integration tide:
1. GPS solutions and wireless communication will further integrate
In the future, in-vehicle GPS will be further integrated with communication technology and navigation function will be combined with traffic information broadcast, speed alarm, etc functions. In addition, in-vehicle GPS also will be further combined with weather, shopping, fault diagnosis and fault forecast, etc. Digital Cyclone Inc, acquired by Garmin as shown in the above table, is a local communication service supplier that provides weather forecast of detailed regions.
2. Integrating the upstream and downstream industry chain is the development direction of navigation manufacturers
The value chain of the navigation industry includes navigation e-map manufacturers, GPS chip & module providers, navigation software enterprises, navigation equipment manufacturers, etc many links. The manufacturers of various links all are vigorously integrating their own upstream and downstream production chain. They hope to improve the competitiveness through shortening the industry chain. Tele Atlas acquiring TomTom as shown in the above table is a case of the navigation manufacturer integrating the upstream e-map publisher. Through this acquisition, TomTom perfected its industrial chain and restricted its competitors to some extent.
3. The market share will be further expanded and the industrial concentration will be further enhanced through merger and acquisition
For many companies, it is an important means to acquire other companies in its industry for realizing leap-forward development. Merger and acquisition could enable the company's technology ability to become stronger in short term and make its market share expand rapidly. For example, as shown in the above table, through acquiring Navman, MIO's competitive advantages in wireless communication GPS navigation products accelerated to be strengthened, its global market share ranked the third, and its share in European market also expanded rapidly, rising to the second place. In 2006, the top three companies in respect of market share, TomTom, Garmin and MIO, accumulatively occupied 70% more shares of the global navigation equipment market. The market concentration was further improved.
It seems that many acquisition and merger cases have not directly influenced China in-vehicle navigation market, yet, it is not true. After acquiring Gate5, Nokia launched N95 navigation handsets equipped with Smart2go produced by Gate5. TOMTOM also has wanted to enter Mainland China a long time before. It entered Taiwan market in 2006. After acquiring Tele Atlas, it could enter Mainland China market through the wholly owned subsidiary of Tele Atlas, Shanghai Changyu. The industrial integration of these international giants is more or less influencing China in-vehicle navigation and handheld navigation market with huge potentials. China local navigation manufacturers will face fiercer competition.
This title is also available in the following language
China Car Navigation Industry Report, 2006-2008 (Chinese Version)
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