"The European personal navigation market is booming!"
The personal navigation market is growing rapidly today. Overall sales of personal navigation in Europe and the US surpassed 8 million units in 2005 and are expected to reach almost 14 million units in 2006.
The European market is far more advanced and successful compared to the US market. Portable navigation that as a market started out in 2002 contains today three segments - PDA navigation, stand alone navigation (PND) and smartphone navigation. The first market that came into place in 2003 was the PDA navigation. In 2004 the PND hit the market even though the PDA sales were larger during that year. In 2005 the PND form factor was very successful on the market and sales outnumbered the PDA navigation sales. Right now the third wave of navigation is coming into the market - smartphone navigation.

Mobile network operators have only recently begun offering navigation services. Not surprisingly operators mainly focus on off-board navigation services and most have chosen hosted white-label or co-branded solutions. A few operators also sell on-board navigation kits for smartphones through their company stores and online shops. However, in Europe, most mobile network operators have not yet announced or launched off-board navigation services. At the end of Q1 2006, less than 20 out of around 70 mobile operators in Western and Central Europe had launched off-board navigation services. These operators have a combined wireless customer base representing about one fifth of the total mobile subscriber base. In the US though, two out of four nationwide operators representing almost 50 percent of the total wireless customer base have launched navigation services.

Although the most attractive personal navigation segment for mobile operators is the off-board segment, operators have opportunities to gain revenues from the other segments as well. Potential revenues from the PND segment primarily derive from data traffic from content download. The on-board smartphone segment offers several revenue sources for operators, mainly from retailing and data traffic, but possibly also from other services as smartphone sales increase.

Author: Johan Fagerberg, Senior Analyst, Berg Insight AB

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