Mobile navigation in China to grow tenfold by 2011

Mobile navigation in China to grow tenfold by 2011
A new report from iSuppli predicts GPS handset shipments in China will rise to 16.5 million units in 2011, more than 10 times the 1.4 million expected in 2007, thanks to falling price for GPS handsets, strong consumer demand and declining Average Revenue Per User (ARPU) at wireless operators.

To increase their ARPU, both China Mobile and China Unicom began to provide navigation services this year. The two operators have partnered with digital-mapping, handset and chipset suppliers to bring GPS to the mobile market. At present, the typical monthly fee for mobile navigation services is $2.50 per subscriber with 5Mbytes of data throughput included. But as an option, consumers can install complete maps into their GPS-enabled handsets to use the navigation service as a fully on-board solution.

Chinese consumers are interested in GPS navigation as shows a recent CCID consulting survey with wireless positioning coming fourth (with 27.4% consumers interested) in the list of services consumers hope to get.

“The greatest barrier to the mass-market adoption of GPS-equipped handsets is their high selling prices,” said Kevin Wang, senior analyst for China at iSuppli. “By the end of 2006, GPS handsets were mainly high-end Smartphones costing more than $700 such as Taiwan-based MiTAC with its model Mio A701 handset and Dopod with its model P800 handset. However, domestic handset OEMs are aggressively entering the market, for example Amoi’s E860 model launched in February has built-in GPS”, Wang noted. This model integrates a GPS chipset from SiRF, an application processor from Intel and Windows Mobile 5.0. The selling price of the E860 is only $450. This competitive price made the E860 the best-selling GPS handset in May.

Furthermore, Chinese handset makers are also integrating GPS into less expensive feature phones. These phones are based on multimedia processors coupled with GPS modules and can be priced at $250.

iSuppli expects that navigation will become a killer application for the mobile industry in China, driving down the price of GPS chipsets and intensifying competition between Taiwanese, Korean and Chinese multimedia chip suppliers.

Thursday, July 5th 2007

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