“The market for GPS semiconductors has reached a plateau,” says principal analyst Dominique Bonte. “All GPS chips offer similar performance. That tends to make market success primarily a matter of price, and of ease of integration with the host devices.”
At the same time there is a growing trend towards integrating GPS with other functions in a single chip. Bluetooth is the most popular initial candidate, and holds the key to the immense global wireless handset market that is critical to expanding navigation and location based services markets, believes ABI research. “CSR recently announced the launch of BlueCore7, the first solution integrating Bluetooth, GPS and FM on a single chip,” says Bonte. “BlueCore7 will be in volume production from Q4 2008 and more launches from other vendors are expected in 2009. Bluetooth manufacturers are already buying up smaller, independent GPS chipmakers in order to integrate their expertise into the larger Bluetooth market. And Wi-Fi is next on the list for integration.”
According to ABI, both these trends mean that the very large semiconductor players will ultimately take the lead in this market: "They have the facilities to churn GPS ICs out in great quantities, reducing their cost. They also have greater abilities to integrate multiple RF technologies in a single unit."
“We expect to see Broadcom, Atheros, NXP and Texas Instruments becoming more important as GPS chipset providers,” Bonte notes. “The future of GPS-only chipset providers may prove limited, and companies such as SiRF, that pioneered this market, may need to be acquired, for their technologies to continue.”
This analysis from ABI is certainly true with regards to the mobile phone market, however, GPS pure players such as SiRF will continue to see interesting opportunities in the consumer electronics market, within the existing PND market as well as in segments such as cameras, laptops, PMPs and gaming consoles.
Assuming that performances are equal for all vendors has also to be moderated. Texas Instruments’ GPS implementation in the Nokia N95 demonstrated very poor performance and CSR’s Bluetooth-GPS chip has still to ship in volume and show its performance in the real world. Additionally, pedestrian navigation and in-door positioning are offering new challenges to this industry; it is not certain the biggest semiconductor companies will offer the best products to meet consumer’s expectations for these new high demanding GPS applications.