“Demand for GPS-enabled consumer devices is continuing to grow,” says senior analyst George Perros. “But pressure on GPS prices and shorter product life cycles will have a negative effect on GPS chipset supplier margins. While the market outlook for GPS as a mobile device feature is positive, the business outlook for semiconductor sector participants is more uneven and quite a bit more challenging.”
ABI Research expects unit growth to be driven by applications for mobile consumer devices, in particular handsets and personal navigation devices. These, along with emerging device markets that include digital cameras and netbook computers, will push total GPS semiconductor shipment growth rates higher in 2010 and beyond. Professional and industrial GPS markets, including machine control, timing and synchronization, and commercial fleet telematics will also experience healthy growth.
GPS IC suppliers are responding to trends in consumer device markets by designing chipsets with higher levels of integration and improved packaging, and in the process are addressing the desire of OEM device suppliers to reduce cost and space while expanding feature content. A recent series of announcements for chips that combine GPS with other radios such as Wi-Fi, Bluetooth and FM is being driven in part by the view among GPS suppliers that more functionality in less space will provide a competitive edge in major consumer device applications.
"Despite favorable growth prospects for GPS semiconductors, continued profitability will require insightful planning and aggressive cost management on the part of sector companies", explained ABI Research.