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New Demand for Portable Navigation Devices

Greater public awareness, lower entry price points, more sophisticated features, and additional channels of distribution are all key trends contributing to the surge in demand for consumer navigation devices.

Portable navigation devices (PNDs) remain the most popular segment of the consumer navigation market, representing 62 percent of the total worldwide market and nearly doubling in size with 93 percent growth over last year. IDC expects the entire consumer navigation market to grow by 53 percent worldwide in 2007.

By far the largest regional market represented in IDC's forecast is Western Europe, where the PND segment has been historically strong, followed by the U.S. However, IDC also expects increased demand for PNDs in Asia-Pacific where China already owns a GPS satellite network.

IDC suspects the 2008 Olympic Games in Beijing will spark PND popularity in China as the world navigates to the games.

According to IDC's special study, PNDs are not the only segment of the consumer navigation market that will experience sizable growth and additional revenue opportunities. Consumer interest in outdoor activities and fitness will likely contribute to growth for outdoor and fitness-focused GPS devices as well as marine products, which IDC says are expected to represent $1.2 billion in revenues collectively by 2011.

While in-vehicle navigation solutions are currently growing at a slower pace than their PND peers, IDC believes this segment will remain strong in many markets around the world as long as technology providers work more closely with auto manufacturers to introduce lower-cost solutions into future new model year designs.

As in-vehicle navigation interest grows, IDC says it will increasingly compete with aftermarket PND category.

The huge opportunities for the entire consumer navigation ecosystem has a number of second- and third-tier players such as LG, Navigon, and Dash, entering the market to get their piece of the pie. IDC believes these new market players will create a shift in product differentiation from traditional hardware offerings to new forms of content and additional services, as vendors focus on total solutions instead of just devices.

"It's clear that services will become an increasingly important part of the navigation picture going forward as these devices compete with other consumer devices such as mobile phones," says Diana Hwang, IDC research manager. "IDC expects overall consumer navigation device growth to remain strong as GPS technology and additional services become integrated into a variety of product offerings affecting the way consumers live, play, and interact in the future."

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