America News: Declining system costs drive growth of North American nav market

America News: Declining system costs drive growth of North American nav market

According to new analysis from Frost & Sullivan, the North American automotive navigation systems market earned revenues of approximately $1.98 billion in 2006, and this is expected to reach $4.64 billion in 2013.

This robust growth rate, irrespective of high system prices, is testament to the strong consumer demand for value-added navigation systems. This is generating rational optimism in the navigation industry regarding the long-term revenue generation potential offered by these systems.

Increased production volumes are expected to cause per-unit prices to drop, bringing navigation systems into the ‘affordable’ bracket for mid-market vehicle buyers. Additionally, falling prices are enabling automakers to offer systems more widely, further driving significant growth in the OE hardware side of the market.

Aftermarket navigation system prices are comparatively lower, which is spurring growth in this segment. However, the dedicated PND aftermarket expects to the high growth to last until 2010, after which it will eventually morph. This is expected to occur as a result of the increasing availability of navigation on innovative and lower-priced substitute products, such as cell phones, smart phones and PDAs.

The high cost of navigation systems is still a major challenge, and it is responsible for the fairly low installation rates in the OE market. Moreover, while prices are significantly lower in the PND aftermarket, these devices lack the "factory look" and are not integrated into vehicles.

Strategies aimed at incorporating low-cost outsourcing, partnerships with technology leaders and content providers, and the development of flexible and easily upgradeable technology platforms are also expected to provide growth impetus.


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