SBD believes that standard-fit navigation on smartphones will act as a trigger to accelerate innovation within both the PND and automotive industries.
Implications for PND suppliers:
The PND market will be hit hardest by the announcements from Google and Nokia, leading to the PND sales peaking in Europe and USA during 2011 and then shrinking significantly by 2014.
The major players will be able to avoid most of the pain in the short-term as smaller players become the first to be squeezed out of the overly-competitive market. However, in order to survive in the long-term PND suppliers will need to diversify away from a reliance on the PND form factor and towards more viable alternatives such as mobile phone apps and embedded OE solutions.
Implications for vehicle manufacturers:
Sales of OE navigation systems will also be hit by the introduction of standard-fit navigation on smartphones, although not as badly as the PND market. Instead of enjoying the previously expected surge in growth following the introduction of ultra low-cost OE systems, OE sales will now grow at a more modest pace.
SBD believes that although there will be relative stability in the sales of the OE navigation over the next five years, the automotive industry is entering into a period of significant change that could lead to an exponential growth in the availability of navigation in the car (either embedded or through integration of smartphone navigation) from 2014 onwards.
The automotive industry has a unique opportunity to capitalise on the growth of standard-fit navigation within the smartphone industry in order to shift towards offering navigation as a standard feature in the car.
However, in order to do so, vehicle manufacturers will need to make the difficult decision of whether to continue focusing on embedded navigation, or whether to shift towards integrating smartphone navigation.