Canalys: EMEA Q3 GPS Phone Shipments Overtake PNDs

November 6, 2008

Shipments of portable navigation devices (PND) in the third quarter (Q3) to Europe, the Middle East, and Africa (EMEA) fell to 4.3 million from 4.8 million in Q2, while shipments of GPS-enabled smartphones soared, rising from 4.7 million to 10.4 million.

That's according to the latest figures from market research firm Canalys. Based on its latest research, the firm estimates that global shipments of PNDs in Q3 2008 rose 14 percent compared to Q3 2007, from 7.7 million to 8.8 million units, with North America and Asia Pacific still seeing considerable volume growth of 49 percent and 25 percent respectively. But shipments in EMEA were down 6 percent year over year in Q3.

"Today, the volume of turn-by-turn navigation solution licenses being shipped and activated for smart phones in EMEA is around 11 percent of the GPS smartphone total," said Chris Jones, Canalys vice president and principal analyst. "But with GPS being built into the majority of smartphones, and users increasingly being given maps on their phone by default, and multiple reasons to use them, the threat to PND vendors is rising quickly. The PND may give a better in-car user experience today, but smartphone vendors are learning and releasing new devices and software all the time. Nokia is already the third largest provider of mobile navigation solutions across all platforms in EMEA, behind TomTom and only narrowly behind Garmin."

The risk to PND vendors is likely to rise further as the economic situation forces more consumers to take a hard look at their discretionary purchases, Canalys suggested.

"We can't live without our mobile phones, and if they have satellite navigation built in, it is inevitable that this will stop some from buying a PND," said Caroline Chow, Canalys analyst. "Those who have not yet bought their first PND are likely to be more occasional satnav users for whom a phone-based solution will usually be good enough. Existing PND owners will need to be given even better reasons to upgrade than were needed before.

"The key to upgrading such users may be delivering genuinely useful, real-time, location-specific data, such as traffic information and fuel prices, but the leading smart phone vendors are better positioned, in terms of having a base of users already paying for services on connected devices, and of course the operator relationships, to capitalize on this need," Chow said. "PND vendors should not underestimate the challenges of moving over to a connected device business model."

In the global PND market in Q3, Garmin re-took the lead it narrowly lost to TomTom in Q2. Shipments of a little more than 3 million PNDs gave it 35 percent market share, ahead of TomTom's 29 percent. Mio rounded out the top three with a 9 percent share of the market (including its devices branded as Navman). Consolidation and price-cutting continued to take their toll on the industry, with smaller vendors finding it increasingly difficult to compete, according to Canalys. Total market value declined 21 percent year on year, despite the 14 percent rise in units shipped. The share of the market taken by the top three vendors continues to rise, with the absolute volume of shipments of all other PND vendors falling to their lowest level since Q2 2007.

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