Is multimedia the next thing for the navigation industry?

Is multimedia the next thing for the navigation industry?

In 2007, the comparatively mature European market grew by more than 80% to almost 17 million PNDs shipped. In North America, shipments were up almost 300% to more than 11 million units, and well over 32 million units were sold worldwide.

Much of the growth comes from low-cost devices, particularly in North America where sales are driven by heavy discounts during the holiday season.

However, the very low margins in the increasingly important entry segment has already forced some vendors to quit the PND business altogether.

PNDs are also seeing increased competition from smartphones with on-board navigation software, off-board navigation solutions for mobile phones, as well as personal media players (PMPs).

PMPs typically have support for all common video, audio and picture file formats. Depending on model, wireless connectivity in the form of Bluetooth, WLAN and even WiBro allows users to transfer files between the PMP and other consumer electronics as well as surf the Internet.

Numerous Korean device manufacturers, including Cowon Systems, LG, Maxian, Samsung and Thinkware, have introduced PMPs with integrated GPS receivers or optional cradles. In the APAC region, sales of PMPs with GPS already reached about 1 million units in 2007.

While high-sensitivity GPS receivers have ensured a good user experience, the cost has accounted for a substantial part of the total PND bill of material despite increased competition and declining prices.

Today, hardware vendors like SiRF and STMicroelectronics are addressing the entry- and mid segment by introducing cost effective system-on-chip solutions that for instance combine a GPS receiver with an applications processor. Converged location-enabled devices like PMPs require powerful, yet low-cost hardware.

An example of new hardware solutions intended to reduce integration complexity and costs for device manufacturers is SiRF's new SiRFprima platform. The platform combines a GPS/Galileo location engine with an application processor, 3D graphics accelerators, as well as audio and video recording and playback capabilities.

PND vendors started to add media player functionality in high-end devices several years ago, and manufacturers like VDO Dayton and Quantum introduced the first devices with integrated mobile TV last year.

However, among the top vendors, Garmin became the first to announce a PND with mobile TV: the nüvi 900T PND.

The troubled handset manufacturer Motorola recently launched the "Mobile TV DH02" as a follow-up to its mobile TV devices launched earlier in the year. The new gadget not only features DVB-H mobile TV and the possibility to deliver interactive entertainment thanks to integrated HSDPA connectivity, but also GPS-based turn-by-turn navigation. The connectivity enables services such as real-time traffic information, voice calls to POIs, SMS and emergency calls.

Author: André Malm, telecom analyst, Berg Insight

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