The introduction of GPS-technology in smartphones and the bundling of navigation and map content with mobile devices is fuelling a boom in global demand - in the EU and Europe subscribers accessing maps and downloading routes from their handset are forecast to jump more than tenfold between 2007 and 2012.
According to In-Stat, integration of GPS into mobile devices - including PNDs, cellular handsets, mobile PCs and a variety of handhelds - will drive volumes for the chipset market over the next few years.
In-Stat said the most promising portable CE categories include ultra mobile devices, handheld games, portable media players and digital cameras.
'Although there are external GPS receivers available for these devices, volumes for applications have been limited,' said Gemma Tedesco, In-Stat analyst. 'Integration of GPS within these products will allow for more widespread use of GPS, and will spur much greater GPS chipset shipment volumes.'
Meanwhile, iSuppli said the E911 mandate in the US as well as carriers' LBS offerings will lead to fourfold increase in global shipments of mobile handsets equipped with GPS capability between 2006 and 2011.
iSuppli data show that shipments will increase to 444 million units by 2011, rising from 109.6 million units in 2006. In the same period, GPS-enabled mobile phones will make up 29.6% of all mobile phones shipped, up from 11.1%.
The FCC requires all operators to precisely locate the position of wireless callers making emergency 911 calls, which can be done if mobile handsets are GPS-equipped.
Qualcomm, the dominant supplier of CDMA solutions, began to integrate GPS processors into its digital baseband semiconductors in 2000. Because of this, CDMA-dominated markets like the US and South Korea are expected to be the leading regions for GPS-enabled mobile handsets.
'Mobile-handset OEMs are increasingly looking into the integration of GPS functionality in devices as a value-added product differentiator,' said Tina Teng, iSuppli analyst. 'Wireless carriers are looking at introducing various new GPS-based services to increase ARPU and LBS could be the key here.'
The most common services allow for user location, turn-by-turn navigation, location search, tracking, information services or social networking.
Telephia, a unit of The Nielsen Company, found that demand for LBS such as navigation will pick up with increased availability of GPS-enabled handsets.
In its second-quarter report on mobile applications, Telephia said that 13 million mobile consumers downloaded a mobile application on their phones. LBS accounted for 51% of the $118 million in revenue created from such downloads. At the same time, LBS navigation publishers Networks In Motion and Telenav Mobile secured shares of 27% and 15%, respectively, of carrier revenue from mobile applications.
However, the incidence of LBS application downloads is still low compared to that of other mobile data activities while the average price per month for an LBS application is $9.23 compared to a range of $3.82 to $5.41 for weather applications, sports and wallpapers/pictures.
Still, there is confidence about the 'enormous potential' for even greater LBS growth with increasing consumer awareness about the capability of their handsets.