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Traffic-Ready PNDs Challenged by Economy

3/17/2009 03:38:00 PM Eastern

Reading, England — A new study by Canalys said consumers still want real-time traffic in their personal navigation devices (PNDs) although the feature is a tough sell in the current economy.

Only 1 percent of the PNDs sold worldwide in the fourth quarter were “connected” — models that can access services such as the Internet, said Canalys.

“One of the challenges facing vendors of the new breed of connected PNDs is that the market has been educated to expect very low prices,” said analyst Caroline Chow. “[Connected PNDs] offer useful live information for the driver, but come at a premium that few are willing to pay, especially in the current climate.”

More than three-quarters of the PNDs that shipped in Q4 were priced less than $250. 

But more than a third of consumers surveyed in November described real-time traffic as a “must have” in their next device — above any other feature listed, said Canalys. A fifth of the 2,400 consumers surveyed said that in the previous six months they had been stuck in traffic and wished they had taken a different route more than six times.

Canalys concludes that vendors must take action to change the consumer’s perception of what a GPS is. When asked why they bought their PND, only 8 percent said it was to avoid traffic.

Canalys’ study also found that Garmin retained its worldwide PND lead in the fourth quarter, increasing its market share to 37 percent, up from 35 percent a year ago. Tom increased its second place share to 30 percent. MiTAC was in third place, owning both the Mio and Navman brands, with a 6 percent share, and was slightly ahead of Nextar.

Also during the quarter, North America overtook the region of Europe, the Middle East and Africa as the largest PND market, with the U.S. alone accounting for 52 percent of worldwide PND sales.

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