Navman predicts 100 per cent growth for GPS in 2007

By Matthew Henry

SYDNEY: Navman expects the local portable GPS navigation market to double in size this calendar year to over 600,000 units after experiencing strong growth over Christmas with many electrical retailers claiming it was their best performing category.

“Christmas was very good, not only for the Navman brand but the whole navigation category. It was the first real mass market Christmas, and it [portable navigation] was the hot product and the hot topic,” Navman sales and marketing manager – Australasia, Marcus Fry told this afternoon.

“We expect to see growth of up to 100 per cent year-on-year in 2007, and we think the market can do this for the next two to three, or even four years.”

According to statistics released by Sensis reported in an article published in today’s Australian Financial Review, more than 300,000 units were sold in 2006, amounting to a 250 per cent increase over 2005.

With continued growth of this order, Fry believes the category will be able to accommodate new players while maintaining healthy market shares for the dominant name-brands.

However, portable navigation specialists such as Navman, TomTom and Mio are also under threat from the growing number of factory-fitted in-car navigation systems and consumer electronics manufacturers moving into the category.

“Are we nervous about car manufacturers? Of course, you would have to be crazy not to be. There is also what we call the 12-volt market, which is the car stereo manufacturers moving into that space, and at the same time there are consumer electronic brands like Sony and LG. But we do this all day long – it [portable GPS] is quite a high maintenance category – each year you need to update the maps and features, so you can’t just dip your toe in and expect to do well,” said Fry.

“If you look at Europe, which is about 18 months ahead of the Australian market – and we tend to follow them – in the UK they sell more luxury cars than anywhere else in Europe, and yet only 15 per cent of new cars are sold with [built-in] navigation. So it is still very early days there, and if you compare the cost of an in-car system versus a portable navigation device there it no comparison – portable can be up to 10 times cheaper.”

Fry said there is room for CE manufacturers in the category, especially if they only enter with a modest range. Brands expected to enter the Australian market with portable navigation devices in 2007 include Sony, LG, Pioneer and potentially Hitachi.

“Sony has already launched in Europe and they haven’t really gained that much market share. They have bigger and better things to focus on than navigation, but for us it is what we do every day,” said Fry.

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