Johan Fagerberg, Managing Director, Berg Insight

The personal navigation market is growing rapidly today. Overall sales of personal navigation in Europe and the US surpassed 8 million units in 2005 and are expected to reach almost 14 million units in 2006. The European market is far more advanced and successful compared to the US market. Portable navigation market that started out in 2002 today contains three segments – PDA navigation, stand alone navigation (PND) and smartphone navigation. The first market that came into place in 2003 was the PDA navigation. In 2004 the PND hit the market even though the PDA sales were larger during that year. In 2005 the PND form factor was very successful on the market and sales outnumbered the PDA navigation sales. Right now the third wave of navigation is coming into the market – smartphone navigation.

Berg Insight says shipments of handset based personal navigation solutions to reach 12 million by 2009 May 23, 2006 – Sweden - A new research report from the analysis firm Berg Insight (www.berginsight.com) forecasts that shipments of handset based personal navigation solutions in Europe and the US will reach 12 million units by 2009. The year 2005 marked the first successful marriages of cellular and navigation technologies, resulting in shipments of around 1 million on-board and off-board systems, mainly in the fourth quarter. Supported by the phenomenal growth recorded in the PND segment, handset based personal navigation solutions are expected to grow by 86 percent year-on-year. “We are very optimistic about the market potential for mobile personal navigation services”, says Johan Fagerberg , senior analyst, Berg Insight. “There is already a wide range of navigation solutions available for both smartphones and Java-enabled handsets. Technologies like A-GPS, Indoor-GPS and Galileo will soon enable handset manufacturers to include satellite positioning in mass-market models for the European market. This will radically improve the market conditions for navigation and all other location-based services.” Jentro, Route66 and TomTom were the top three providers of handset based personal navigation solutions during 2005. Thanks to a successful final quarter on the German market, Jentro was able to snatch the top spot with its off-board solution for Java-handsets. Meanwhile Route66 and TomTom reinforced their market positions with on-board solutions for Symbian OS smartphones. About Berg Insight Berg Insight offers premier business intelligence to the telecom industry. We produce concise reports providing key facts and strategic insights about pivotal developments in our focus areas. Our vision is to be the most valuable source of intelligence for our customers. Contact information: Johan Fagerberg , Managing Director E-mail: johan.fagerberg@berginsight.com Phone: +46 31 711 3091

The personal navigation value chain comprises three principal categories of players. These are map data providers, navigation solution providers and device manufacturers. In many cases, dynamic content providers and mobile operators are also involved.

1. Digital map data for the personal navigation market are today available from two dominant players – NAVTEQ and Tele Atlas.
2. Navigation software is available from numerous providers developing products for several hardware platforms. Some software providers develop software for all platforms and operating systems, and both on-board and off-board systems. For example, Telenity a USA based company provides value-added Service Delivery Platform (SDP) components includes a Location Enabling Server for application developers and network operators to develop and deploy personalized navigation services that bring tracking, routing, and communications services together. Subscribers of such services can get access to location-based instant messaging, email and localized internet services. Other software provider includes ESRI, a leading Geographic Information System (GIS) solution provider offers mapping software that is integrated with Telenity's system.
3. However, only a few players design and manufacture PNDs as well as develop navigation software in-house. Most PND providers outsource the hardware manufacturing and navigation software development and focus on providing competitively priced and customized bundles to end users.

Off-board solution providers offer their client applications either directly to end users for download via the Internet or as white label solutions for network operators. Network operators can choose to provide off-board navigation solutions by licensing software platforms or by relying on complete hosted solutions. End users can get access to dynamic content using RDS-TMC receivers or via GPRS. In off-board solutions the dynamic content is usually integrated on the server side and sent together with the map data to the end user's navigation device using a wireless network.

Mobile network operators have only recently begun offering navigation services. Not surprisingly operators mainly focus on off-board navigation services and most have chosen hosted white-label or co-branded solutions. Potential revenues from the PND segment primarily derive from data traffic from content download.

The majority of handset based personal navigation solutions sold in Europe and the US in 2005 were on-board systems. In 2006, off-board systems are expected to reach parity with on-board, before becoming the dominant segment in 2007. Nearly 1 million handset based navigation solutions were sold in Europe and in the US during 2005. By 2009, this figure is expected to reach 12 million units.

Figure 1: Annual Sales of handset based navigation solutions (Europe/US 2005-2009)