Based on its latest research, Canalys estimates that global shipments of portable navigation devices (PND) in Q3 2008 rose 14% year on year, from 7.7 million to 8.8 million units, with North America and Asia Pacific still seeing good volume growth, of 49% and 25% respectively. Yet shipments in EMEA (Europe, Middle East and Africa) were down 6% in the same period.
Meanwhile, shipments of smart phones with built-in GPS soared in EMEA, rising from 4.7 million last quarter to 10.4 million in Q3.
Today, the volume of turn by turn navigation solution licences being shipped and activated for smart phones in EMEA is around 11% of the GPS smart phone total, said Chris Jones, Canalys VP and principal analyst. But with GPS being built into the majority of smart phones, and users increasingly being given maps on their phone by default and multiple reasons to use them, the threat to PND vendors is rising quickly. The PND may give a better in-car user experience today, but smart phone vendors are learning and releasing new devices and software all the time. Nokia is already the third largest provider of mobile navigation solutions across all platforms in EMEA, behind TomTom and only narrowly behind Garmin.
The risk to PND vendors is likely to rise further as the economic situation forces more consumers to take a hard look at their discretionary purchases. We cannot live without our mobile phones, said Jones, and if they have satellite navigation built in, it is inevitable that this will stop some from buying a PND.
Those who have not yet bought their first PND are likely to be more occasional sat-nav users for whom a phone-based solution will usually be good enough. Existing PND owners will need to be given even better reasons to upgrade than were needed before, added Canalys analyst Caroline Chow.
The key to upgrading such users may be delivering genuinely useful, real time location-specific data, such as traffic information and fuel prices, but the leading smart phone vendors are better positioned, in terms of having a base of users already paying for services on connected devices, and of course the operator relationships, to capitalise on this need. PND vendors should not underestimate the challenges of moving over to a connected device business model.
In the global PND market in Q3, Garmin re-took the lead it narrowly lost to TomTom in Q2. Shipments of just over three million PNDs gave it 35% market share, ahead of TomToms 29%. Mio rounded out the top three with a 9% share of the market (including its devices branded as Navman).
Consolidation and price cutting continued to take their toll on the industry, with smaller vendors finding it increasingly difficult to compete. Total market value declined 21% year on year, despite the 14% rise in units shipped. The share of the market taken by the top three vendors continues to rise, with the absolute volume of shipments of all other PND vendors falling to their lowest level since Q2 2007.