Personal navigation - the next target for handset vendors

Revenue growth from handset sales is slowing significantly in developed markets and, if the current economic slowdown persists, could even turn negative after 2009, predicts a new report from Informa Telecoms & Media.

Forecasts such as this, whilst perhaps not surprising, will provoke handset vendors to aggressively search for new and untapped markets for their products.

One area that seems likely to be addressed in the short-term is to use the much-improved handset GPS to attack the portable and in-car navigation segment which has boomed over the last five years. This would already seem to be underway in Europe with a decline in shipments of portable navigation devices (PND) in Q3, whilst the number of smart phones sold with inbuilt GPS more than doubled from 4.7 million in Q2 to 10.4 million in Q3.

Albeit that the major PND vendors, such as Garmin and TomTom, maintain their sat-nav (now unkindly branded as sat-nag) devices provide a much better in-car user experience, Smartphone developers are fast learning and releasing new devices and software all the time. Evidence of this, according to the market research firm Canalys, comes from Nokia which is already the third largest provider of mobile navigation solutions across all platforms in Europe.

What will also favour handset vendors in this market is the view that mobile social networking will become a key driver for the uptake of location-based services--such as friend finders, local search and geo-tagging. Instant messaging--an application yet to achieve its potential--could also benefit from GPS-enabled handsets.

If the handset vendors are able to produce devices that can exceed the current capabilities of PNDN in-car navigation systems--together with integrating the location technology with services such as social networking, IM and the location-aware advertising, etc, then the future of these pure-play PND vendors must be in question. - Paul

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