Following music and camera phones, GPS-enabled handsets poised to become the next focus
A decade or so ago, when mobile phones first appeared, no one would have thought that these simple gadgets would one day evolve into a device packed with a huge array of features. Picture taking and music playing are the two most commonly seen features being integrated into today's versatile handsets. Camera phones now account for more than 50% in aggregated shipments. Although the ratio of music phones is lower, their sales continue to climb sharply. As the two functions become more widespread, satellite navigation is expected to be the next application in the age of feature-rich cell phones.
Nokia's aggressive entry in GPS market brings GPS phones into spotlight
Nokia, the leading global handset manufacturer, has been keen in expanding its multimedia entertainment services. The launch of its N Series is a perfect example of the company's efforts towards this direction. However, Nokia is not the first company to roll out GPS-enabled devices. In the past few years, a handful of PND (Portable Navigation Device) and PDA manufacturers have already launched products equipped with a satellite navigation system. Examples include Mio's A701 and A501 and the iPAQ hw6900 series from HP. Several smart phone makers, such as HTC, ASUS and Gigabite, have also introduced similar products.
Despite being a step ahead of Nokia, they are still essentially PND or PDA manufacturers. By connecting to an external GPS module in enabling the satellite navigation function, such products are mostly targeted towards business users or a particular user base. Therefore, in the past few years, they have been unable to stimulate strong growth in the GPS handset market. With handset giant Nokia entering the market with its N95 and 6110 Navigator models, its influence cannot be overlooked, as it commands a 35% worldwide handset market share, and the fact that the GPS phones are designed from the perspective of a cell phone maker.
User Interface Design and Electronic Map Platform are two key factors in deciding whether GPS phones will be widely embraced
Employed mainly in vehicles, GPS navigation devices have appeared in the consumer market for over a decade. Europe's TomTom, the US's Garmin and Taiwan's Mio are currently the major manufacturers of such devices. In recent years, the trio has made huge strides in the development of their PND product portfolio. For 2007, 20 million PNDs are projected to be sold, and the growth potential is believed to remain strong in forthcoming years. Generally, PND users are most concerned with the positioning accuracy, ease of use and accessibility in keeping the map up to date. The three established firms have devoted substantial resources in tweaking their products to meet these requirements. Likewise, cell phone vendors face the same difficulties if they make a similar foray. To forge a closer relationship with electronic map providers, Nokia has collaborated with TomTom, Route 66 and TelMap, along with acquiring the German company Gate 5. These actions underline Nokia's determination in developing a strong GPS platform within its phones.
Small Display size may limit ability of GPS phones' to fully replace PND
For a long time, people have eyed the possibility of integrating the GPS function directly into the handset. However, minimal growth has been seen in this segment. Professional GPS makers remain convinced that PNDs will continue to maintain a strong grip in the market, as they still have the upper hand, in terms of display size, color saturation and resolution. Meanwhile, a lot of difficulties still need to be overcome before the technology of integrating the GPS chip and signal receptor becomes mature. In addition, the increased power consumption from the GPS function poses a challenge too. The commercial readiness of the 3G network also initially raised concerns on how convenient it would be in downloading updated electronic maps. Amid the rapid advancements in technology, the aforementioned problems should gradually fade. But the ultimate question---Will the launch of Nokia GPS phones hinder the development of the PND? If we look at the camera and MP3 phones, their introduction did not weaken the sales of the MP3 player or digital camera, but instead contributed to their continued growth. PNDs are expected to experience a similar trend.
The average screen size of the PND is 3.5 inches or larger, and its resolution reaches 320 x 240 or 480 x 272. Sporting a resolution of 320 x 240, Nokia's N95 display size is 2.6 inches, while the 6110 Navigator is roughly 2.2 inches. Needless to say, the GPS phones' display size and resolution puts them at a disadvantage in rivaling against the mid to high-end PNDs. To gain a bigger role in the GPS market, Nokia subsequently introduced the NOKIA 330 Auto Navigation---a PND used primarily for satellite navigations. All in all, DRAMeXchange believes the launch of Nokia GPS phones will increase the market penetration of similar handsets, and stimulate future PND market development.
