Smartphone Navigation Booms in China But Doubts Over In-Car Future

Smartphone navigation is projected to have outgrown the rest of the Chinese navigation market in 2011 but isn't likely to lead to in-car revenue opportunities.

That's according to Andrew Hart, senior telematics & ITS specialist at SBD, which recently published a report on the trends for navigation systems in China.

Although smartphone integration in the car is being seen as the route to a lower cost experience in Europe and the US, the analyst said there is a big question-mark over whether it will be the same in China.

“So whilst it's having a big role out of the car we are not convinced it's necessarily going to lead to much revenue opportunities inside the car,” he said.

Hart said one reason is because from a vehicle manufacturer's point of view, integration solutions for smartphones are expensive compared to ultra low-cost aftermarket and PND solutions in China.

He said that solutions such as MirrorLink still require hardware such as a display and processor to be fitted in the car – all of which adds to the cost.

“There's a feeling of why would you pay USD200-300 for a smartphone integration kit when you can get a fully-embedded solution that fits nicely with the car and has a premium feeling?” he said.

“So while smartphone navigation is clearly huge outside the car, we are not convinced that will translate to a large number of people asking for integration of smartphone navigation inside of the car.”

Unique market
It's not just differences over in-car integration that make the Chinese market unique. Hart said no-one has a very clear idea of exact figures. He said even the map suppliers in China do not really know how their products are being used.

“If asked about market share and forecasts they struggle just as much as anyone else,” he said. “Talk to 100 people in China about the future of its navigation market and you will get 100 different answers.

“So yes, smartphone navigation is huge. Whether it's five, six or ten times bigger than the rest of the market, it's massive.”

It's also very fragmented, with estimates suggesting that four out of five smartphone navigation systems on the market are pirated.

“So customers aren't really paying for those kind of systems. The majority are downloading them illegally and finding ways around the licensing issues,” said Hart.

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