We start our review of the 10 most critical questions by one about growth. PNDs have been one of the great consumer electronics success stories of the past two
years (remember TomTom reporting revenue growth of 89% for financial year
2006 and continued growth in 2007). But how long can it last ?
A new report from Juniper Research estimates that revenues from portable
navigation solutions, including PNDs and software
solutions will exceed €8.3 billion in Western Europe
by 2012 (that's about twice as much as today). According to ABN Amro, 16 millions PNDs will be shipped in Europe in 2007, growing to 31 millions in 2011.
Growth has been mainly driven by price elasticity, with sales increasing as prices were falling rapidly. With very good products priced at 200€, the market boomed, and we are likely to see products hitting Xmas under the 100€ price tag.
Innovation will now heavily sustain growth: we expect PNDs to include real-time traffic information, to be connected, and to include community-based services centered around map upgrades (see TomTom's mapshare) and geolocalized content (watch NAVX !). This will provide GPS users good reasons to upgrade to new and better devices.
The market will continue to grow in the next 5 years, with inexpensive entry level devices stimulating first time buyers and a large offer of more sophisticated devices contributing to transform the market into a replacement market.
technorati tags: TomTom Garmin PND GPS navigation mobile phone PDA
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