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North American Automotive and Consumer GPS Navigation System Markets
Frost & Sullivan, Sep 2004
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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