Personal navigation device (PND) sales will grow “at an anemic rate” over the next five years before giving way to GPS-enabled phones, according to an In-Stat report published today. The total semiconductor market for PNDs will surpass $1 billion next year before beginning to decline, In-Stat said. Much of that growth is expected to be driven by connected PNDs that can deliver information such as gas prices and local weather, but manufacturers will have to lower their price points and offer innovative apps if they’re to compete in the superphone era.
While I’m a big fan of mobile phone navigation apps, there is a lot to like about stand-alone navigation devices. Dedicated gadgets typically offer larger screens and more simplified layouts, making them easier to use on the go, and they don’t require a user to choose between making a call and accessing location information. And subscription-based services that leverage 3G connections not only allow service providers to deliver information updates at will, they also enable users to access relevant web-based content such as traffic information and travel tips.
But the price points for dedicated devices are simply too high to compete with mobile phones — especially in a tough economy. Modern smartphones (and even lower-end handsets) typically include GPS functionality, and carriers have wisely begun to package navigation offerings with data plans to introduce them to consumers. There is a ton of opportunity for players that can add value to navigation via user-generated content such as real-time traffic reports and travel reviews, but for the most part, those opportunities will be realized via apps on mobile phones — not through stand-alone devices. When it comes to delivering navigation information to mainstream users, the battle is quickly shifting from the hardware to the applications themselves.