GPS IC Shipments to Reach 1B Annually in 2013

(Business News & Technology News, 20 Mar 2008)

The upsurge in purchases of GPS (Global Positioning System) devices used in satellite-based navigation is fuelling a similar growth in the market for GPS receiver chipsets. According to ABI Research, the GPS IC shipments will reach one billion annually in 2013. Average selling prices (ASPs) will continue to fall, but the effect on vendors' revenue streams will be more than offset by this strong growth in volume.

"Three factors will intersect to shape the future of the GPS IC market. The average price of the chipset will fall to $3.50 or below by the end of 2008, permitting a true mass market adoption. This fall in ASP is driven by manufacturers' goal of producing receivers that can be included in lower-margin devices such as mobile phones: handset-based GPS will be critical to strong market penetration," says Jamie Moss, industry analyst. "The benefits will filter down to more traditional GPS uses such as in-car navigation. Meanwhile, we're seeing growing numbers of acquisitions: large chip manufacturers buying up specialist fabless GPS IC vendors in order to include their technologies in solutions that combine GPS with varied wireless RF product offerings, especially Bluetooth."

Significant examples of such acquisitions in the second half of 2007 include Global Locate, acquired by Broadcom; GloNav by NXP; and u-Nav by Atheros.

In 2007, one firm—SiRF—held a commanding 70 percent share of the GPS IC market. It achieved this by getting in early and aggressively targeting the market for consumer devices: while professional GPS has been around for some time, it is a much smaller and slower-growing market segment.

"In terms of absolute performance, there's not a lot to choose between rival manufacturers. To win important contracts the chipset must be as inexpensive as possible and as easy as possible for device manufacturers to integrate with Bluetooth, Wi-Fi, FM radio and cellular solutions," says Moss. "As it was with Bluetooth, there is no great proactive consumer demand for GPS in mobile phones today, but once it's there, people will use it and expect it."

Click here for more information on the report "GPS Semiconductors" by ABI Research