GPS Changing So Fast, It May Get a Speeding Ticket

Hot tech and trends from The NPD Group's director of industry analysis.

ByABC News
April 19, 2007, 6:23 PM

April 20, 2007 — -- Global positioning system units help consumers get to where they want to be. But the GPS market is increasingly where companies want to be.

Traditional portable navigation device vendors, such as Garmin and Magellan, are competing against:

-- Mobile audio brands such as Pioneer and Alpine

-- Electronics companies such as Sony, JVC and LG Electronics

-- PC companies such as HP

-- Analog navigation brands such as Rand McNally and ViaMichelin...

...and a host of other companies, from strong competitor TomTom to 2006 holiday season breakout Mio.

In fact, the product category is moving so quickly that participants might just get a speeding ticket. According to projected retail tracking we've done here at the NPD Group, where we do market research, GPS drove nearly half a billion dollars in sales in 2006. The category was one of the fastest-growing consumer technology segments that NPD tracked, with year-over-year units growing an amazing 255 percent.

This even outpaced the growth rate of 2005, where the market saw unit growth approach an also impressive 170 percent.

Virtually all of the category growth has been in portable navigation devices that are typically attached to one's windshield via suction cup or mounted on the dash. These are in contrast to the larger in-dash systems that boast more features, better media integration, and cleaner aesthetic continuity, but at an increasing price premium over these portable units.

Indeed, some portable navigation devices -- such as Garmin's Nuvi line and Mio's Digi-Walker H610 -- are now so small that they can be carried in one's pocket. The cellular industry is also keeping a close watch on the category, with Sprint, Verizon, and now AT&T offering cell phones that are surprisingly effective at navigating consumers to their destinations.

What's down the road? To avoid commoditization, market leaders such as Garmin and TomTom will need to diversify their offerings.

Garmin has developed a GPS unit that supports MSN Direct, the FM-based service from Microsoft that can broadcast updates on weather, traffic, stocks prices, sports scores, and local movies.