SEMA eNews Vol. 10, No. 22, May 31, 2007

SALES OF PORTABLE NAV DEVICES EXPECTED TO GROW


The market for in-vehicle global positioning systems (GPS) is growing, with sales forecasted to exceed 3.3 million units this year, according to a recent Wall Street Journal report. The Consumer Electronics Association (CEA), meanwhile, says that sales of aftermarket personal navigation devices experienced triple-digit growth in 2006, with over 2.2 million new units sold.

If CEA's online survey is any indication of what 2007 sales hold, U.S. consumers could spend substantially more than that. Nearly one-quarter (24%) of online consumers are planning to purchase a GPS device within the next year, spending an average of $410, which could result in sales reaching $4.1 billion in 2007, according to the company's latest survey of online consumers.

"Navigation remains one of the fastest-growing technology products, behind maybe only LCD televisions," Ross Rubin, director of industry analysis for the consumer marketing research firm The NPD Group, told the Wall Street Journal.

GPS systems are offered as an option by automakers for many new vehicles. Navigation systems were offered in 7.3% (1,229,523) of the 2006 model-year vehicles sold in the United States, according to Ward's Auto data. But sales of portable devices will likely outnumber sales of built-in units by more than two to one in 2007, says Phil Magney, president of the Telematics Research Group. The reason? Prices have fallen on portable GPS devices-from roughly $550 in 2003 to $396 a unit last year, according to CEA-a result of reduced production cost from economies of scale. Manufacturers are now targeting a wider demographic of consumers by lowering prices.

The article further explains that an influx of new GPS systems have entered the market from many well-known brands. These include Alpine, Audiovox, Clarion, JVC, Panasonic and Sony. In addition, new units with added features-such as weather information, cell-phone Bluetooth connectivity and MP3 playback-are being introduced from established market leaders Garmin, TomTom and Magellan.

"Convergence has spread GPS across multiple product segments, resulting in greater consumer awareness and budding adoption of the technology," says Steve Koenig, CEA's senior manager of industry analysis. "The availability of new services like real-time traffic information will continue to drive this segment forward in the coming years."

Sources: Vella, Matt. (May 16, 2007). "Finding Your Way in the GPS Market." Wall Street Journal. Accessed May 22 from www.wsj.com; Consumer Electronics Association (CEA). (April 9 2007). "Consumer Demand for GPS Headed in the Right Direction, CEA Research Finds." CEA press release.