BeiDou industry on path similar to GPS

July 13, 2016  - By
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The seventh China Satellite Navigation Conference (CSNC) met in May in Changsha, capital of Hunan province in south-central China. Chairman Mao attended high school and teaching college here, and the city has many monuments and stories about his younger days.

This was the seventh different host city for CSNC, as the China Satellite Navigation Office (CSNO) spreads the prestigious conference among various provinces.

The 2016 conference was every bit as big as last year’s in terms of number of attendees, papers presented, exhibit hall space and booths (77 exhibitors). I co-chaired the joint CSNC-Institute of Navigation (ION) panel with Dr. Jun Su. The session was well attended by both local Chinese experts and international visitors.

The collaboration between these two large GNSS technical organizations is an excellent trend as both benefit from the cross-fertilization. This September, there will also be a joint CSNC-ION panel at ION GNSS+ in Portland.

Industry Boom. The domestic Chinese satellite navigation industry is thriving, based on the growing availability of Beidou signals combined with the baseline GPS constellation. Government projects for a wide range of applications provide ample markets for domestic suppliers to build a solid business.

In general, however, the high-volume cellular handset market is still the domain of the traditional global suppliers, not only because of their experience with high-volume applications, but also the trend toward handset vendors requiring a complete platform solution including modem.

Startup companies seven years ago have grown into large, vertically integrated higher end suppliers, opening the low-cost, general purpose market sector for new entrants.

CSNC shows that startup companies seven years ago have grown into large, vertically integrated higher end suppliers, opening the low-cost, general purpose market sector for new entrants.

I noticed a corresponding cyclic trend in the domestic industry, which is similar to the way the GNSS business evolved in other regions. The initial entrants, who were small startups seven years ago, have become relatively large, vertically integrated companies supplying higher end, higher value systems. Most of these are in the agriculture, fleet tracking and survey industry, and many of them are now publicly traded companies. This has opened up the low-cost, more general-purpose portion of the market for new entrants.

Several of those new companies were founded by people who have left their initial startups on acquisition to start again. Although this industry is somewhat geographically isolated market-wise (they service mostly domestic customers), the parallels to way the GPS market developed 15 years ago in the United States are absolutely uncanny.

Perhaps in an industry based on cyclical orbits of satellites, it shouldn’t come as a big surprise that there is an overarching cyclical trend in the way markets develop around the world. I look forward to attending CSNC 2017 as it returns to Shanghai, site of the second CSNC in 2011.

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