U.S. PND Shipments Doubled During Q2
By Amy Gilroy -- TWICE, 8/14/2008
Palo Alto, Calif. — Shipments of personal navigation devices (PND) rose by nearly 100 percent in the United States during the second quarter, but prices continued to fall, according to research firm Canalys.
Shipments climbed to 3.7 million, up 96 percent year-on-year, from shipments of 1.9 million for the period in 2007. This represented a sequential gain over the first quarter of 32 percent, said Canalys.
But as average selling price fell by an estimated 40 percent from last year, dollar sales to retailers saw shallower gains of 20 percent, said Canalys.
Examining U.S. market share for the quarter, Garmin and TomTom together took more than 80 percent of the market.
“The market is showing huge growth in terms of units sold, but this is coming at a price,” said Chris Jones, Canalys VP and principal analyst. “Price-cutting has left several vendors struggling to turn a profit, and the economic climate isn’t helping. Meanwhile they have to continue to finance research and development to ensure they have the right feature set to attract future new buyers and those who will soon be considering upgrading.”
Canalys estimates for 96 percent PND growth echo Garmin’s second-quarter results, showing 100 percent unit growth in the United States, and TomTom’s results for the quarter showing 70 percent growth in worldwide shipments.
Canalys said Garmin had a 47 percent market share for the quarter, followed by TomTom with a 25 percent share, Magellan with an 11 percent share, Mio with 4.5 percent and Navigon with 3.6 percent. Other U.S. vendors shared a 9 percent stake in the market, with Nextar mentioned as showing high growth for the quarter, according to Canalys.
The top three vendors, Garmin, TomTom and Magellan, “have consistently taken more than 80 percent of the market for several quarters,” it said.
Supplier consolidation is expected to continue over the next 12 months, not only due to price erosion but to competition from cellular phones and smartphones, which accounted for about half a million additional new users during the second quarter, said the analyst firm.
“We expect to see the rise of not just navigation, but an array of map-enabled and location-based services (LBS) on mobile phones in the coming quarters,” said Canalys analyst Caroline Chow. While LBS has been talked about for many years, it is just now gaining consumer awareness and technology is now better able to provide it, creating “a strong foundation for this market to develop.”
In fact, the entire market will see “a shake-up in business models as PND vendors, in particular, have to address the mobile phone threat,” Jones added.
