CONNECTED NAVIGATION DEVICES

CONNECTED NAVIGATION DEVICES

The personal navigation market
continues to grow rapidly in Europe and North America. The

first Personal Navigation Devices (PNDs), i.e. transferable devices with integrated
GPS

receivers and digital maps primarily designed for car navigation, were introduced
in 2003. In

Europe, the PND segment achieved a breakthrough in 2005 and gained mass-market

acceptance in 2006, with sales reaching 9 million units. In North America, very
strong sales

during the holiday season contributed to remarkable growth in 2006, to about 2.8
million units

shipped. Moreover, in 2007 sales are forecasted to reach about 16 million units
in Europe and

roughly 6.5 million in North America. The products have matured and following
much lower

prices resulting from lower component costs and product engineering, the consumer
value

has improved substantially. Intensified marketing campaigns, expanded distribution
networks

and more shelf space dedicated to PNDs in stores have also contributed to the
growth.

The rapid growth of the segment has gained the attention of numerous actors in
many

industries. At the moment, over 60 vendors from the GPS-device, navigation software,

consumer electronics, car infotainment industries are selling PNDs on the European
and

North American markets. While many of the major vendors, notably TomTom, Garmin,

Magellan and Navman, develop navigation software in-house, others usually base
their PNDs

on software from white-label developers such as deCarta, Destinator Technologies,
Elektrobit

Corporation, NAVIGON and NavNGo. Nevertheless, the four largest vendors, TomTom,

Garmin, Mio Technology and Magellan, have managed to increase their combined market

shares in Europe and North America to slightly more than 80 percent in H1 2007.

However, 2007 is more likely to be remembered as the year of major reshaping of
the

personal navigation industry. In the beginning of the year, the Taiwanese handheld
device

ODM manufacturer MiTAC added Navman’s PND operations to its existing Mio
Technology

line of devices. Although more consolidation is very likely in the future, the
deal pales in

comparison with Nokia’s acquisition of NAVTEQ and the rivalling bids for
Tele Atlas.

The new owners intend to run the new businesses as separate entities and offer
the products and

services on equal terms to all current and future customers. Even though the longer-term

strategies are less certain, the acquisitions can well lead to improved chances
for the

remaining independent map providers to establish viable alternative sources for
map data.

In the longer term, the PND segment will likely be affected by the increasing
competition from

handset based navigation services, as well as emerging low cost factory installed
in-dash

navigation systems. There are already over 3 million subscribers to navigation
services for

mobile phones in North America and the market continues to grow fast. Along with
more GPS

handsets being launched in Europe by major vendors, fast adoption of navigation
services for

handsets can be expected also in Europe. Berg Insight estimates that sales of
PNDs in

Europe will grow with a compound annual growth rate of nearly 23 percent from
9 million

units in 2006 to 31 million units in 2012. In North America, where the competition
from low

cost in-dash systems and mobile phone navigation services is higher, PND shipments
will

grow from 2.8 million units in 2006 to 22 million units in 2012, yielding a compound
annual

growth rate of almost 20 percent.

To enhance the competitiveness of PNDs, vendors are continually refining the user
interface

to facilitate command and control, as well as improve the information presentation.
New

models will gradually introduce automatic speech recognition technology, 3D map
features

and photo-realistic textures. Besides navigation related features, many vendors
are also

adding multifunction capabilities such as digital cameras and digital TV receivers
to

complement existing media player functions. In order to make navigation services
even more

useful in everyday situations for more people, introducing wireless connectivity
to PNDs can

enable integration of online services such as local search, content sharing, enhanced
traffic

information and map updates.

Table of Contents........................................................................................................................
i



List of Figures............................................................................................................................
iv



Executive summary.....................................................................................................................1



1 Personal navigation solutions..............................................................................................3

1.1 Personal navigation solutions......................................................................................3

1.1.1 In-dash, factory installed navigation systems .......................................................4

1.1.2 In-dash aftermarket systems .................................................................................5

1.1.3 PDAs, smartphones and mobile phones ..............................................................6

1.1.4 Personal Navigation Devices ................................................................................7

1.2 The PND value-chain...................................................................................................9

1.2.1 Digital map and content providers........................................................................9

1.2.2 Software developers............................................................................................10

1.2.3 GPS chipset manufacturers ................................................................................11

1.2.4 PND vendors .......................................................................................................12

1.3 PND segments...........................................................................................................13

1.3.1 Standalone car navigation PNDs ........................................................................13

1.3.2 Crossover PNDs..................................................................................................15

1.3.3 Connected PNDs.................................................................................................16

1.3.4 Embedded PNDs ................................................................................................17



2 Map data and content providers........................................................................................19

2.1 Digital map data suppliers.........................................................................................20

2.1.1 NAVTEQ ..............................................................................................................21

2.1.2 Tele Atlas.............................................................................................................23

2.1.3 AND .....................................................................................................................25

2.2 Travel guide, POI data and weather information providers.......................................26

2.2.1 CustomWeather...................................................................................................26

2.2.2 Falk Marco Polo Interactive.................................................................................26

2.2.3 Fodor’s ................................................................................................................27

2.2.4 ViaMichelin ..........................................................................................................27

2.2.5 Wcities .................................................................................................................27

2.3 Traffic information providers......................................................................................28

2.3.1 Clear Channel Radio Total Traffic Network.........................................................29

2.3.2 Inrix ......................................................................................................................29

2.3.3 ITIS Holdings.......................................................................................................29

2.3.4 Mediamobile........................................................................................................30

2.3.5 SmartRoute Systems...........................................................................................30

2.3.6 Trafficmaster........................................................................................................32

2.3.7 T-Systems Traffic.................................................................................................32



3 Enabling technologies .......................................................................................................33

3.1 Digital maps and content...........................................................................................33

3.1.1 Digital map data ..................................................................................................33

3.1.2 POI data...............................................................................................................34

3.1.3 Rich and dynamic content ..................................................................................34

3.2 Traffic information infrastructure................................................................................35

3.2.1 RDS-TMC.............................................................................................................35

3.2.2 Next generation traffic services ...........................................................................36

3.3 Navigation software platforms ...................................................................................37

3.4 Positioning technologies ...........................................................................................38

3.4.1 GPS and Galileo..................................................................................................38

3.4.2 Hybrid technologies ............................................................................................40

3.5 PND hardware and software costs............................................................................40

3.6 Intelligent traffic initiatives..........................................................................................42

3.6.1 Intelligent vehicle systems and intelligent transport systems.............................43

3.6.2 The eCall initiative ...............................................................................................45



4 Software developers ..........................................................................................................47

4.1 Navigation software developers ................................................................................47

4.1.1 Elektrobit Corporation .........................................................................................48

4.1.2 deCarta................................................................................................................49

4.1.3 Destinator Technologies .....................................................................................51

4.1.4 NAVIGON ............................................................................................................52

4.1.5 NavNGo...............................................................................................................53

4.1.6 Off-board navigation platforms ...........................................................................54

4.2 Text-to-speech and automatic speech recognition software ....................................54

4.2.1 Loquendo ............................................................................................................54

4.2.2 Nuance Communications....................................................................................55

4.2.3 SVOX...................................................................................................................56

4.2.4 VoiceBox .............................................................................................................57



5 PND vendor profiles...........................................................................................................59

5.1 Dash Navigation ........................................................................................................60

5.2 Falk ............................................................................................................................61

5.3 Garmin .......................................................................................................................62

5.4 Magellan ....................................................................................................................64

5.5 MEDION.....................................................................................................................65

5.6 Mio Technology.........................................................................................................66

5.7 Navman......................................................................................................................67

5.8 Nokia..........................................................................................................................68

5.9 ROUTE 66..................................................................................................................70

5.10 Sony...........................................................................................................................71

5.11 TomTom ....................................................................................................................72

5.12 ViaMichelin.................................................................................................................75



6 Market trends and forecasts ..............................................................................................77

6.1 Vendor market shares ...............................................................................................78

6.2 Industry trends...........................................................................................................80

6.3 European PND shipments forecast ...........................................................................82

6.4 North American PND shipments forecast..................................................................84



Glossary ...................................................................................................................................87






List of Figures



Figure 1.1: Car navigation systems ............................................................................................4

Figure 1.2: Car navigation system shipments, Europe, 2002-2006 (million units).....................7

Figure 1.3: Car navigation system shipments, North America, 2002-2006 (million
units) .........8

Figure 1.4: GPS chipset vendors..............................................................................................11

Figure 1.5: PND vendors...........................................................................................................12

Figure 1.6: Typical PND functionality and features by segment ..............................................14

Figure 1.7: Crossover PNDs .....................................................................................................15

Figure 1.8: Alpine and TomTom embedded PNDs ..................................................................16

Figure 2.1: Examples of digital map and content providers.....................................................20

Figure 2.2: Operational data for major digital map data suppliers (2006) ...............................21

Figure 2.3: TMC service providers in Europe and North America............................................31

Figure 3.1: GPS Navigation Message.......................................................................................39

Figure 3.2: Component and software costs for PNDs (2007)...................................................41

Figure 3.3: Intelligent vehicle safety systems ...........................................................................44

Figure 4.1: Key navigation software vendors............................................................................47

Figure 5.1: Major vendors of PNDs and handset-based navigation solutions .........................59

Figure 5.2: The redesigned Dash Express with 4.3-inch touchscreen.....................................60

Figure 5.3: The Garmin nüvi 250W PND...................................................................................63

Figure 5.4: The Mio Technology C620 and C230 PNDs ..........................................................67

Figure 5.5: Nokia 6110 Navigator smartphone and Nokia 500 Auto Navigation PND.............70

Figure 5.6: The TomTom GO 520.............................................................................................74

Figure 6.1: Annual PND shipments, Europe and North America (2003-2006).........................77

Figure 6.2: PND vendor market shares, Europe, 2006 and H1-2007.......................................78

Figure 6.3: PND vendor market shares, North America, 2006 and H1-2007 ...........................79

Figure 6.4: Navigation software vendor market shares, 2006 and H1-2007 ............................79

Figure 6.5: Annual PND shipments, Europe (2007-2012) ........................................................82

Figure 6.6: PND ASP, device and service revenues, Europe (2007-2012) ..............................83

Figure 6.7: Annual PND shipments, North America (2007–2012) ............................................85

Figure 6.8: PND ASP, device and service revenues, North America (2007–2012)
..................86