PND’s heydays are numbered


In 2007, PNDs accounted for about half of all navigation device shipments, with the remainder divided between automotive in-dash systems, smartphones and mobile handsets. But the PNDs' share of shipments will drop to 35% by 2010 and to 23% by 2013.

According to Richard Robinson, principal analyst at iSuppli, PNDs have flourished in an environment with little competition during the last four years – being cheaper and easier to obtain than in-dash systems, and easier to use than mobile handsets.

However, Robinson says there will be a significant cannibalisation of the PND market by low-cost in-vehicle solutions and wireless handsets in the coming years.

The PND market's fast-growth phase is ending, and after achieving growth of 123.7% in 2007, global PND unit shipments will increase by just 43% in 2008 and 23.5% in 2009.

Meanwhile, shipments of navigation-enabled mobile handsets will rise by 91.4% in 2008 and by 70.6% in 2009. Shipments of navigation-enabled smart phones will increase by 66% in 2008 and 51.6% in 2009.

By 2011, navigation-enabled mobile handsets will account for 36% of total navigation system shipments, beating PNDs (30%) for the first time.

While the PND market will continue to generate significant sales opportunities for PND manufacturers and their suppliers over the next few years, the industry is likely to undergo consolidation, with many companies expected to leave the market.

"The survivors will be those companies that successfully build economies of scale in the supply chain and that achieve reductions in engineering, hardware and silicon costs in order to keep pace with rapidly declining prices," says Robinson.

The under-penetrated market for in-vehicle navigation continues to be the main growth driver for PND sales, as well as the decline in the average price per unit.

While traditional tier-one suppliers for automotive electronics companies have dominated the in-dash navigation system market to date, Robinson says that OEMs are starting to consider cheaper options, which will open up the market to competition from non-traditional OEM hardware and software manufacturers such as Garmin and TomTom, or even handset makers like Nokia and Samsung.

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