A Glowing Report Doth Not a Golden Future Make

November 27, 2013  - By

The tech press and broad public media have both made much ado about a November market report from the European GNSS Agency (GSA). Most accounts have focused on a GSA prediction of an installed base of 7 billion GNSS-enabled devices worldwide by 2022, and nearly every account has replicated the GSA math to trumpet “almost one for every person on the planet.”

Oh Hosanna.  We (will) have reached holy ground at last.

Other than asserting that this bonanza “has the potential to deliver additional significant benefits, not measured in this report, especially in terms of time and fuel savings, as well as efficiency gains,” neither the GSA itself nor any pundit’s account of the report that I have seen ventures to speculate on how this might actually change daily human life. Hopefully ‘twill not be on the order of how cell phones have affected society, communication, and interaction; read tweeting and social-network stress. But knowing what little we do about human nature, this possibility is not at all to be discounted.

Allow me to walk the plank out into left field long enough to quote from a 2009 NBC News Science report titled “Is Twitter evil?”  “Researchers probing the workings of the brain have found that it takes longer for feelings of social compassion and admiration to register on our neural circuits — and they worry that the rapid-fire effect of texting and tweeting could have ‘potentially negative consequences’ for our moral fiber.”

Could total, global, continuous, pervasive location-awareness in the palm of everyone’s hand possibly lead down a similar path? I’m sure that cell-phone enthusiasts also promised vast, billionish-plus benefits, with absolutely no downside, three decades ago.

If I can pry myself back from Nostradamus mutterings — and I am sure you are glad that I have now done so — the GNSS Market Report Issue 3 contains a great deal of data worth considering.

Said document foresees compound annual growth rates (CAGRs) for “GNSS core” and “GNSS-enabled” revenues increasing by 9 percent through 2016 and 5 percent through 2020, to attain €350 billion ($478 billion) per year. Of the 2022 total, GNSS core revenues will comprise about €100 billion (US$137 billion).

To further differentiate “core” and “enabled,” this from the report’s early Market Definitions section:

“This market report primarily considers the core GNSS market. For multi-function devices, such as smartphones, the core market includes the value of GNSS functionality only (rather than the full device price) and service revenues directly attributable to GNSS functionality (e.g. data downloaded by smartphones to use Location-Based Services).

“For multi-function devices, a correction factor is taken into account, for example:

• GNSS-enabled smartphone: only the value of GNSS chipsets is counted, estimated at 1% of the price.

• Personal Navigation Devices (PNDs): 100% of retail value since GNSS is the key enabler.

• Aviation: the value of the GNSS receiver inside the Flight Management System is taken into account.

• Precision agriculture system: the retail value of the GNSS receivers, maps, and navigation software is counted.

“The Executive Summary also presents results for the enabled market. The enabled market represents the services and devices enabled by GNSS, and includes the core market. For the enabled market, the entire retail value of the smartphone is included.”

The 72-page report breaks out market segments, focusing in turn on: location-based services (LBS), road, aviation, rail, maritime, agriculture, and surveying. The weight of the report, as you might guess by the necessity of reaching that 7 billion figure, falls primarily on LBS, a heading that for the GSA encompasses “smartphones, tablets, digital cameras, laptops, fitness and people-tracking devices, and mobile-data revenues.”

What’s good for the mass market must surely be good for satellite makers and operators around the world, as they attempt the jump from one to many systems.  That’s the underlying but unstated premise of the report.  “Multi-constellation receivers become widely available on the market” trumpets the Executive Summary headline on page 8.  In what is certainly the money pitch for the Prague-based, European Union-funded agency, “Galileo is recognised as a valuable element in multi-constellation systems, and it is already present in more than 30% of receiver models, well ahead of its full operational capability.”

Nevertheless, GLONASS is the second GNSS constellation choice of receiver manufacturers after GPS.

For BeiDou, the researchers will only venture that “Several equipment manufacturers, particularly those based in Asia-Pacific, have started to offer BeiDou-enabled models.”

More than 70 percent of models on the market are GPS-SBAS capable (SBAS comprising WAAS, EGNOS, and MSAS) and this penetration will grow further.

In a final provocative note (neither final nor provocative from the GSA’s point of view, although I confess it causes me a vague unease), the four-fold increase in the number of GNSS devices will be “largely driven by increased penetration in regions outside Europe and North America.”

Production of the report relied on “advanced forecasting techniques together with a validation process with market experts.”

Lest you feel unfairly treated by my curmudgeonly take, here is some actual data generated by and taken from the report.

Global GNSS Market Size, from GNSS Market Report 2013 Issue 3

Global GNSS Market Size, from GNSS Market Report 2013 Issue 3

Installed Base of GNSS Devices by Region, from GNSS Market Report 2013 Issue 3

Installed Base of GNSS Devices by Region, from GNSS Market Report 2013 Issue 3

GNSS capability in receivers, from GNSS Market Report 2013 Issue 3

GNSS capability in receivers, from GNSS Market Report 2013 Issue 3


About the Author: Alan Cameron

Alan Cameron is the former editor-at-large of GPS World magazine.