● Asterisk X100P FXOHelicomm ZigBee PlatformHome WiFi NetworksIEEE 802.11New Taiwan Hwa Yao TekNexTone RentalRF Linx WLAN RadiosVoIP PSTN GatewayWi-FiWiMAXWirelessWireless securityWirelessGRID Bridgesz LinksZigbee / IEEE802.15.4

Struggling GPS Device Market Faces a Turning Point

Navigation: Main page

Author: WildC@rd

Consumer navigation devices have gone from expensive gadgets to mainstream gear in just three years, but Europe's largest maker is struggling. The experience of Netherlands-based TomTom NV -- which saw earnings fall 83 percent in the first quarter -- suggests the market for stand-alone global-positioning systems is at a turning point. "What we saw for the first time is that selling prices fell, but volumes didn't improve enough to compensate," analyst Eric de Graaf of Petercam said after the results were reported Wednesday. "It's a signal the market is getting saturated." Some analysts believe that as stand-alone versions are overtaken by cell phones and other devices with navigation technology built in, GPS devices will become low-margin commodity products, like pocket calculators. But others think a smart company could turn GPS devices into premium products the way Apple Inc. made its iPod music player stand out from a host of cheaper devices. For now, TomTom's larger U.S. competitor, Cayman Islands-based Garmin Ltd., appears to be faring better by virtue of its greater range of products. Including Taiwan's MiTAC International Corp. -- owner of the Navman and Mio brands -- the top three GPS makers hold around an 80 percent market share, giving them scale advantages over smaller players. But competition is coming from many directions, including big names like Nokia Corp., Sony Inc., Google Inc. and probably Apple. "TomTom and Garmin are branded well," said Thilo Koslowski of Gartner Research. "But functionally there's not much difference" yet among GPS devices. In 2007 alone, including strong holiday sales, 33.9 million units sold, almost triple the 11.9 million sold in 2006. Now, 10 percent of U.S. drivers and 20 percent of those in Europe own a navigation device. But prices for basic stand-alone devices have fallen below $200 from $500 or more. TomTom reported a net profit of $12 million in the first quarter, which ended March 31, down from $70.3 million a year earlier. Sales revenue fell 22 percent to $147 million. Some analysts now fear TomTom's $4.63 billion bid to buy digital mapmaker Tele Atlas NV, also based in the Netherlands, could come undone. MiTAC and Garmin have yet to report first quarter results. But sales figures posted on MiTAC's Web site show a 15 percent decline in the first quarter. Garmin, due to report on April 30, hasn't altered its guidance since February, when it said it expected strong sales growth in 2008 despite price declines. Garmin benefits from offering high-end devices for aviation and marine navigation -- and from reporting in dollars. Also, it plans to meet the cell phone threat with its own combination phone and navigation device later this year, and it has announced a partnership integrating AOL's MapQuest into its devices.
Alpha Telecom

Big Players 'Extremely Interested' In Boston Wi-Fi
Slow off the mark in developing any citywide Wi-Fi network, the City of Boston has received major bo...

Cisco buys Meetinghouse for $43.7m
Cisco Systems is to buy Meetinghouse Data Communications for $43.7m in cash and stock in a bid to bo...

Virgin Mobile takeover talks with NTL 'ongoing'
Virgin Mobile says discussions with cableco NTL about a possible Ј900m takeover are "ongoing" and i...