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Keeping Pace with Consumer Applications Vital to GPS Market Expansion 2.13.04

February 13, 2004
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As prices for low-end GPS handhelds continue to fall in the North America, inexpensive consumer access is expected to make this a high-profile electronics market.

Alliance and high-volume consumer applications are strongly driving the North American Global Positioning System (GPS) equipment markets. As prices for low-end GPS handhelds continue to fall, inexpensive consumer access is expected to make this a high-profile electronics market. However, profit margins per unit are likely to fall, going down from the current 30-40% to the 10-15% range, as the market matures.

New analysis from Frost & Sullivan reveals that this market generated revenues totaling $3.46 billion in 2003. Total market revenues are expected to reach $10.77 billion in 2010.

Commercial margins in established, high-accuracy applications such as land-based and hydrographic survey may stay in the 30-50 percent range even as those in the land-based recreational handhelds and recreational marine product sectors shrink.

As such, first-to-market technical improvements hold the key to success. Enhanced displays, software, battery power, and functionality can differentiate new applications in this competitive market where many products offer similar features.

Competition is also materializing for GPS in the form of Galileo--the planned European satellite positioning system--which has finally garnered funding for construction and testing. Anticipating signal/equipment compatibility needs and developing positioning equipment to use both GPS and Galileo can be advantageous for manufacturers.

The United States and allied forces around the world have already become reliant on GPS as a means of weapons delivery, navigation, and location in remote locations. Now, niche applications in vehicle and personal location are expected to attract new users to the GPS equipment markets.

For now, manufacturers only need to keep pace with the high-volume application demands especially from in-vehicle navigation, fleet management, and land/marine recreational handheld markets. This might require an in-house expansion in manufacturing capabilities or the giving of partnerships/licenses to other facilities for product production and integration.

Source: Frost & Sullivan, Feb. 9, 2004

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