Strong Consumer Interest in GPS for Traffic, Nav, LBS

August 1, 2006 GPS World

My research firm has just released a comprehensive new study covering U.S. consumer interest in a wide range of GPS products and services, including vehicle navigation systems, telematic services (for example OnStar), and location-based services for cell phones. The study also quantifies consumer use and satisfaction with navigation systems and telematic services, and provides feedback from early adopters of LBS.

The 2006-07 LBS, Telematics and Navigation Systems Study was sponsored by leading cellular carriers, automotive manufacturers, GPS navigation system suppliers, digital mapping companies, and suppliers of LBS applications and technology. The study was based on a series of focus groups in major U.S. cities and a nationwide online survey of nearly 5,000 consumers. The following are among key findings.

Vehicle Navigation. The majority of consumers favor portable GPS navigation systems over factory-installed systems, which suggests that the hot portable navigation device (PND) market will continue to grow. In 2005, U.S. PND sales totaled about one million units, twice the level of 2004 sales. The market is reportedly on track to reach 2–3 million units in 2006, despite the fact that prices of bestselling PNDs are considerably higher than the maximum amount most consumers report that they would be willing to pay for a unit.

Another strong indication that the vehicle navigation systems market will continue to expand is that owner satisfaction with both portable and vehicle-installed navigation systems runs very high. While many consumers favor portable navigation systems, those who currently own vehicles with installed navigation systems expressed very strong interest in purchasing installed navigation systems in the future. When nationwide survey participants were asked if they prefer to purchase a factory-installed navigation system, an aftermarket installed system, a portable system, or none of these, only 23% of the total sample indicated that they would favor a factory-installed system. However, among those who currently own or lease a vehicle with a factory-installed system, 71% indicated that they favor purchasing another factory-installed system.

Cell Phone Navigation. Consumers expressed interest in cell phone-based navigation systems, though many are wary about trying to view a small cell phone display while driving. Early adopters of cell phone-based navigation services are generally pleased with these services, though satisfaction ratings for these services are not as high as for portable or installed navigation systems.

Traffic Information. Consumers indicated strong interest in a service that would provide traffic information for their vicinity or route. Consumers with particularly strong interest in traffic information services include those who spend an above average amount of time driving each day and owners of vehicle navigation systems.

The report also assesses consumer satisfaction with current sources of traffic information, such as radio, Internet, and TV. It also quantifies willingness of consumers to pay for traffic information services and assesses whether motorists prefer to receive visual or audible traffic information while driving, and whether they prefer to receive the information on a navigation system, on a cell phone, or in some other way.

Many motorists reported they would be willing to allow their cellular carrier to anonymously monitor their phone's movements on the road to gauge traffic speed, especially if they received a discount on navigation and traffic info services for sharing this information.

Location-Based Services. The study rates interest of U.S. cellular subscribers in 22 cellular applications, including text messaging, downloading video clips, watching live TV on cell phones, e-mail, and several location-based services (LBS). Overall, seven of the top 10 rated cellular applications are LBS. Among those of greatest interest to consumers are navigation assistance, location-based traffic and weather, and child tracking. The strong interest in LBS suggests that cellular carriers can increase revenues and customer loyalty through introduction of location-based services.