The market for GPS-enabled mobile devices will grow rapidly over the next four years, from an estimated 163.9 million shipments in 2007 to almost 572 million in 2012.
Until recently this market was driven by the CDMA players, namely Qualcomm, serving large CDMA markets such as the US, where the E911 mandate stipulates the use of location-based technologies in handsets, and in countries like Korea and Japan where demand for location-enabled services is higher than in other regions.
More recently, large handset vendors such as Nokia have put their weight behind GPS and are now ramping up shipments across Europe in response to rising demand for GPS applications.
We expect growth to slow in the near term in the US, Korea and Japan, where we already see good levels of GPS device penetration. Although other markets such as Western and Eastern Europe as well as China and India start from lower overall penetration, they will grow significantly in the early period.
By the end of the forecast period Western Europe will be the largest market for GPS-enabled mobile devices, shipping 145.8 million in 2012. This is driven by the ambitions of the handset vendors rather than operator-led services. North America remains a large market, with 113 million shipments in 2012. Asia-Pacific also remains a large market, with 106 million GPS devices shipped, but China/India is close on its heels with 100 million devices.
The clearest indicators of GPS support in future handsets are the following:
"¢ Qualcomm chipset - GPS is already an entrenched feature of a majority of Qualcomm chipset designs (which has had to support the technology widely in order to meet the US emergency services mandate) and does not accrue a significant uplift to the device bill of materials (BOM) cost due to Qualcomm's handset market share. While Qualcomm's GPS is not, as yet, always switched on by its handset OEM licensees, our enquiries suggest that activated GPS will reach near saturation in all but the lowest-end Qualcomm-based devices by the end of the forecast period. Qualcomm's domination of CDMA technology means this has a profound effect on the penetration of GPS in markets where CDMA is widespread.
"¢ High-end operating system (OS) - the desire of OEMs to make GPS data available to a range of device applications and services (there is little point in offering the capability without it) creates a close correlation between high-end OSs and GPS capability. This is especially true of Windows Mobile-based devices, where GPS is already commonplace (a large proportion of 3G Windows Mobile devices also use Qualcomm chipsets) and looks set to head for near saturation by the end of the forecast period. GPS functionality is also a key attribute for Apple's iPhone roadmap and on future Android-based devices, where much of the functionality is predicated on the availability of accurate location information. Symbian and BlackBerry OS-based devices will also feature a high penetration of GPS, the former being driven by high volumes from Nokia in particular.
Less predictable
Outside of these two cases, GPS integration on mobile handsets will be considerably more piecemeal and less predictable, with few OEMs canvassed able to provide a clear roadmap.
However, some pointers to adoption are available.