According to a recently published report by international automotive analysts SBD, navigation software is rapidly becoming a commodity in Europe and USA, which will lead to standard-fit navigation on smartphones accounting for over 70% of all navigation systems shipped in 2014.
This represents a significant disruption to the traditional navigation business model, and will force PND suppliers and vehicle manufacturers to ramp-up innovation in order to remain competitive.
SBD’s analysis was confirmed recently by Microsoft’s announcement that it will be following in the footsteps of Nokia and Google by offering standard-fit navigation software on its mobile operating system. Apple is also rumoured to be developing a similar solution.
In the meantime, mobile phone operators are battling to retain their brand strength, with O2 announcing free navigation from Telmap for all its customers in Germany.
This rush to offer free navigation software is expected to lead to almost 90 million smartphones being shipped in 2014 with standard-fit navigation in Europe and USA, compared with only 32 million PNDs and 6.5 million OE navigation solutions.
The lesson for PND suppliers in the long-term is clear: adapt or shrink. Major suppliers such as TomTom and Garmin are already diversifying their solutions away from the PND form-factor and are positioning themselves within the automotive industry as low-cost alternatives to traditional tier-one suppliers.
Smaller PND suppliers will struggle to stay afloat as the market for PNDs is forecast to begin shrinking from 2012.
For the automotive industry the future of in-car navigation is less clear, and vehicle manufacturers face an increasingly dizzying array of options, from in-car app stores to varying levels of smartphone integration.