Navigating the Wireless Opportunity

Navigating the Wireless Opportunity

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Contents:
WHITEPAPER

Navigating the
Wireless Opportunity

This whitepaper is an extract from:

Portable Navigation
& Wireless Tracking
Western European Markets & Forecasts
2007-2012

. . . information you can do business with

Whitepaper ~ Navigating the Wireless Opportunity

White Paper –
Navigating the Wireless
Opportunity
In June 2005 Juniper Research published a comprehensive study on the global market for
mobile location based services (MLBS). This was a time when the mobile industry was taking a
more realistic view of the potential for location based services, following a number of years of
hype and unfulfilled expectation. The last two years have seen location based services take
giant strides forward in terms of delivering real business and consumer benefits. Juniper
Research sees location based services as appealling to to four fundamental market needs as
shown in Figure 1 below.
Figure 1: Location Based Services Address Four Fundamental Market
Requirements

Source: Juniper Research

Page 1

Whitepaper ~ Navigating the Wireless Opportunity

Focusing on these four fundamental requirements, it is not surprising that tracking and
navigation applications were forecast to be key to the development of the market for location
based services, particularly as precise location technology became more commonplace.
Tracking and navigation deliver strong benefits in the areas of corporate efficiency, corporate
and consumer safety and end user convenience. Navigation applications also deliver
considerable “enjoyment” benefits, particularly where they include extensive POI (Points of
Interest) location and local search capabilities.

Personal Navigation Solutions –
“Must Have” Products for European
Drivers
Satellite positioning based personal navigation solutions, “Sat Navs”, are rapidly becoming the
“must have” consumer products for drivers in Western Europe. The last two years have seen
an explosive growth in the market for personal navigation devices (PNDs) as affordable GPS
technology has become available to the mass market. Product ranges from suppliers such as
TomTom, Garmin, Navman, Mio etc fill the shelves of European consumer electronics and
automotive accessory outlets and feature high on their web sales charts.
Key enablers of this exposive growth have been:


Necessity – whilst few products are absolutely necessary, increasing congestion on
European roads has brought products aimed at congestion avoidance to the fore.



Affordability – GPS device prices have plummeted in recent years, as sales volumes
have increased. Form factors have also got considerably smaller, enabling the
incorporation of GPS technology in many more devices and particularly personally
portable devices.



Product capability – fuelled by increasing demand, product capability has improved
over the last three years making hitherto top end features commonplace and
shifting Sat Nav devices from “nice to have” to “must have” for many regular
drivers.



Peer group pressure – the domino knock-on effect and the realisation that
someone else has something which is really useful. This is a powerful purchase
incentive.



Convergence in consumer electronics product – progress towards the ubiquitous
personal entertainment and communications device continues, as manufacturers
produce devices capable of running an wide range of appplications with increasingly
acceptable performance in all areas.

Page 2

Whitepaper ~ Navigating the Wireless Opportunity

Figure 2: Person Navigation Market Drivers

Source: Juniper Research

The PND has clearly captured the public imagination and will continue to evolve to serve the
requirements of drivers for high performance road navigation solutions and other specialist
terrestrial navigation applications. However, as a number of industry players emphasised to
Juniper “there are far more mobile phones than vehicles in the market”. In 2005 there were
between 230 million and 240 million motorised road vehicles in Western Europe. Mobile
subscribers in the same area for 2005 were just under 300 million. By 2010 the vehicle
population is expected to have risen to nearly 250 million, whilst the mobile phone population
is forecast to increase to 473 million. As a base for future mass market sales for personal
navigation solutions, it is not surprising that eyes are beginning to turn to mobile phone
subscribers and their increasingly capable multi-purpose handsets.

Wireless Tracking Applications Bring
Business and Personal Security
Benefits
Concurrent with the growth in navigation solutions, commercial organisations have been
waking up to the business benefits of fleet tracking solutions. Fleet tracking applications of
some description have been available since the GPS satellite network was made available for
commercial use, but due to the size and cost of early receivers and the high cost of integrating
tracking solutions with back office solutions, application was restricted to areas with the
greatest immediate commercial benefit such as businesses in the transportation industry
(commercial and public sector).
The cost of placing tracking units in vehicles has dropped dramatically in recent years as the
cost of GPS receivers has plummeted, bringing the economics of vehicle tracking solutions to a
wider spectrum of businesses.
Low cost tracking has also become available using mobile network location technology,
although this has not gained as much ground as many would have thought, particularly in
Europe, where location technology has been Cell-ID and its derivatives. However with SUPL
compliant A-GPS positioning solutions being now introduced to European GSM/UTMS

Page 3

Whitepaper ~ Navigating the Wireless Opportunity

networks the location accuracy barrier will be reduced, providing further impetus to the
growth of tracking solutions to improve fleet utilisation and operating efficiency.
Stimulus to the take up of tracking applications for the tracking of both vehicles and staff by
businesses has also come from the requirement to conform with working time/health and
safety legisation. In both business and consumer sectors concerns over safety – personal,
children, elderly relatives and even pets – have also generated renewed interest in people
tracking technology and applications.

Market and Product Directions
Whilst demand for mobile navigation and tracking applications continues to increase
dramatically in Europe, particularly in Western Europe, where high quality mapping
information is available, there are a number of on-going debates on market and product
direction. Some current hot topics are:

Original Equipment v Portable Solutions
It is Juniper’s belief that originally installed solutions for both vehicle tracking and navigation
will increase significantly over the forecast period and that this will restrict the opportunities
for portable solutions and aftermarket sales, particulary towards the end of the period.
With eCall tracking requirements covering an increasing proportion of the vehicle fleet, some
tracking cability will be in a high proportion of vehicles by the end of the forecast period.
However this does not mean that they will be participating in regular tracking. Location for
emergencies is what it says, and hopefully for the majority of drivers will not be needed at all.
Similarly tracking vehicles that are stolen is something that doesn’t happen very often in most
vehicle’s lives. Even with more originally installed vehicle tracking capability many solutions will
make use of capability that is already there and there will still be a substantial aftermarket for
enhanced products and services.
With regard to navigation, Juniper believes that original equipment solutions will permeate an
increasing proportion of the commercial and private vehicle fleets, in the same way that in
vehicle entertainment became commonplace in virtually every road vehicle model, and
recapturing some of the market share lost in recent years. Differentiation within vehicle
models then focuses on the depth of functionality rather than whether the functionality is
there at all. This will be driven by customer demand for integrated vehicle management and
driver utility solutions, particularly linked with active safety features, cost reduction and also by
advances in connectivity permitting the ease of update currently found with portable solutions.
Juniper also believes that an increasing number of people will have more than one navigation
solution – one which is in vehicle and has all the benefits of a tightly integrated in-vehicle
solution and one which is portable (and probably serves a variety of purposes). PNDs which
are portable, but not useful for other portable applications may begin to fall between the two
stalls.

Page 4

Whitepaper ~ Navigating the Wireless Opportunity

PND v Mobile Phone
In a similar vein, to the debate over originally installed equipment and portable solutions, is the
debate over the role of the mobile phone as a multi-purpose device. Why carry more than
one portable device when you can get all the functionality you want on one? This argument has
been used with respect to office applications on smart phones, music and video playing
capability and now navigation and tracking. Does the increasing capability of mobile phone
devices hearld the death knell for the PND?
The extremes of response to the “why carry more than one portable device?” question would
be “exactly – I only want to carry one portable device” and “I carry multiple devices because
no one device can be optimised for all these applications and I want the best performance in all
the applications I use”. The reality is that most people fit somewhere in between.
People want different functionality and have different priorities. They have different standards
and requirements with regards to things like audio quality, visual clarity, keyboard/control
design, form factor etc. They will draw different lines. Some will undoubtedly opt for the single
portable device for all their mobile applications, particularly as the quality penalty on individual
decreases and for some even disappears. Others will opt for a number of devices, particularly
where performance is paramount. Vehicle navigation is an application where performance is
very often paramount. It impacts personal safety, time management and efficiency and Juniper
believes that the market for solutions focused primarily on navigation will remain strong.
Juniper Research believes that mobile phone navigation will make some inroads into PND
navigation over the next five years, but probably not as much as originally installed solutions.
Mobile phones will certainly take an increasing portion of the portable navigation market, but
many users of mobile phone navigation will also have better featured/larger screen applications
for serious vehicle navigation, whether PND, or originally installed equipment.
What will have a big impact on the uptake of portable navigation solutions is the increasing
availability of SUPL compliant A-GPS handsets in the GSM dominated European markets.
Whilst it is relatively easy to use a GPS receiver with a bluetooth enabled mobile phone, it is
not as convenient as having the GPS receiver embedded in the phone. This will increase the
uptake of mobile phone navigation, particularly off-board solutions. However not all of this will
be direct revenue generating except for mobile operators, who will gain data revenues. An
increasing amount of low cost, or even free mapping and rudimenatry navigation software is
now available for mobile phones and even comes preloaded on higher spec models. Such
solutions are designed to increase the usage of mobile data services generally and location
based services in particular, or may even be primarily for handset differentiation. These
solutions may be perfectly adequate for ad-hoc pedestrian and vehicle navigation for many
users.

Wireless Connectivity
Most industry analysts see connectivity, and particularly wireless connectivity, as the way
forward for navigation and tracking solutions. Few PNDs have integrated wireless connectivity,
but an increasing number offer bluetooth connectivity to wireless devices, primarily mobile
phones, to enable hands free calling and OTA update of dynamic data. The inclusion of FM
transmitters is also providing connectivity to in-vehicle entertainment systems, although it
should be noted that FM transmitters are not permitted in all European countries due to RF
restrictions.

Page 5

Whitepaper ~ Navigating the Wireless Opportunity

PDA suppliers are also embracing wireless connectivity as an essential component for a multiuse business tool, in order to survive against the smartphone onslaught. This is reenergising
the demand for PDA navigation applications and also opening up new opportunities in
workforce tracking and workflow management. As noted above it is also merging the worlds
of PDAs and smart phones.
On the tracking side, wireless connectivity allowing real time tracking and communication
between driver and base, is now becoming the norm is systems designed to deliver a range of
business and personal benefits in addition to historical reporting.

Industry Consolidation
The resolution of all the issues above will see increasing convergence of products and
overlapping functionality. In order to acquire technology, channels, customers, new markets
and in some cases to hedge their bets, suppliers are forging an increasing number of alliances,
mergers and acquisitions. Both the navigation and tracking sectors are seeing supplier
consolidation, with both verticle and horizontal integration. Examples in the last couple of
years of both vertical and horizontal integration include:


TomTom aquisition of Datafactory and now Tele Atlas



Garmin acquisition of leading European distributors



Cybit acquisition of mapAmobile, BlueFinger and Thales Telematics

This consolidation trend is forecast to continue through the forecast period as the location
based services industry matures and as different sectors of the industry expand and contract.
Some mergers and acquisitions will undoubtedly move outside the tracking and navigation
sphere. For example, wireless community services have some proven synergies with map
based tracking and navigation.

Western European Market
Wireless Tracking Solutions

for

Vehicle tracking services have been targeted at the business community by mobile service
providers for many years, using a combination of cell ID location and GPS, in conjunction with
specialist integrators and application service providers. Mobile operators saw these services as
a way of adding value for business customers and stimulating business data traffic.
However, corporate vehicle tracking applications have not taken off as rapidly as many
predicted and certainly cell ID (mobile network based positioning) based solutions suffered
from low accuracy outside metropolitan areas (whether or not it was needed). However, a
number factors are bringing about a change in market sentiment and Juniper Research believes
that good growth can be expected from corporate vehicle tracking applications over the next
five years driven by:


Legislative push – to comply with working time legislation, emergency location
requirements and duty of care obligations.

Page 6

Whitepaper ~ Navigating the Wireless Opportunity



Commercial pressure – to make optimum use of expensive assets (vehicles and
staff) through better scheduling and route planning and also to avoid fraudulent
claims relating to the whereabouts of staff and vehicles.



Competitive pressure – as more businesses adopt tracking solutions to gain better
control of their supply and distribution chain operations, the more evident the
business benefits become and competitive pressure reinforces the trend in order to
match competitive performance.



Technological advance – enabling previously somewhat separate technologies to be
linked to provide more accurate positioning, richer business information and more
user acceptable applications. An example of the latter being combined tracking and
navigation, whereby operatives accept the privacy implications of being tracked for
the benefits of satellite navigation.

On the consumer side there has been a reluctance on the part of the market to adopt people
tracking solutions in the face of privacy and data security objections. However the fact is the
mobile phone is a trackable device, whether or not it is GPS enabled. GPS certainly adds
accuracy to location, but it is not essential for a mobile phone. Other wireless connected GPS
devices can also send location information back to a remote tracking operator. People
tracking, offers a range of applications waiting to be exploited, if the ethics and safety of doing
so can be assured.
Juniper Research believes that tracking people through their mobile phones, or mobile
communication enabled devices, will begin to take off over the next five years, although in
revenue terms it will continue to lag vehicle tracking applications. The most common use of
mobile phone location information for people tracking/location is in buddy finding applications.
This will remain so, but it will also remain a largely ad-hoc activity.
More regular tracking of people through mobile communications devices will be driven by
concerns over personal safety, duty of care obligations in businesses, or a more general drive
for improved business efficiency.

Western European Market
Portable Navigation Solutions

for

Juniper estimates that there are currently nearly 34 million users of portable navigation
solutions of all types in Western Europe. The vast majority of these are using PNDs. By the
end of the forecast period in 2012 this user base is expected to have increased more than 3
fold, but only half of these will be PND users, the rest will be using on-board, off-board, or
hybrid solutions on multi-purpose devices. However, it should be noted that use of one
product type does not preclude the use of another to suit different circumstances. There will
be a growing number of people using both PNDs/in-car solutions (for serious car navigation)
and mobile phone solutions for other personal navigation purposes.
Figure 3 shows Juniper’s forecasts for the size of the portable navigation solutions market in
Western Europe, broken down by type of solution, together with forecasts through to 2012.
The total value of the portable navigation solutions market in Western Europe is estimated to
be just under €4.3 billion in 2007. This is forecast to grow to just under €8.4 billion by 2012,
despite continued and fierce price erosion. This represents a cumulative average annual
growth rate of 14.5% per annum, with higher growth in the earlier years, levelling out as the

Page 7

Whitepaper ~ Na
avigating the W
Wireless Opp
portunity

We
estern Europ
pean market becomes sa
aturated and competition from facto fitted integrated
n
ory
solu
utions increa
ases.

Figure 3: P
Portable Na
avigation S
Solution Rev
venue Grow (€ 000 in Western
wth
0s)
Eur
rope 2007 – 2012

9,000,00
00
8,000,00
00
7,000,00
00
6,000,00
00
5,000,00
00
4,000,00
00
3,000,00
00
2,000,00
00
1,000,00
00
0
2007

Off-board Nav Services
On-board Nav Software
PND

2008

2009

2010

2011

2012

So
ource: Juniper Re
esearch

Wit
thin the reve
enue total, c
cumulative average annual growth fo the three product sec
or
ctors is
fore
ecast to be 10% pa for the PN sector, 30% for s
e
ND
software so
olutions whi
ich are
predominantly on-board an 71% for s
nd
solutions wh
hich are predominently off-board, although
s
ery
e.
n
very low by recent
this last figure is from a ve low base Growth in PND revenues looks v
stan
ndards, but it should be remembered that this is an average figure encom
d
s
mpassing continued
stro growth f the the n
ong
for
next two years, and low revenue grow thereaft
r
wth
ter.
At t moment PNDs are m
the
t
must have co
onsumer electronics dev
vices for driv
vers and the leading
bran are acqu
nds
uiring the sa
ame sort of brand recog
gnition withi their sect as the iP and
in
tor
Pod
Wa
alkman brand within the portable m
ds
e
music sector. However, w
whilst the market for de
edicated
personal navigat
tion devices will not go a
away, Juniper believes th this type of device wi begin
hat
ill
loose some of its domin
nance of the personal na
e
avigation sec
ctor by the e of the forecast
end
f
to l
period.

Page 8

Whitepaper ~ Navigating the Wireless Opportunity

Order the Full Report
Portable Navigation & Wireless Tracking: Western
European Markets & Forecasts 2007-2012
This whitepaper is taken from the report entitled “Portable Navigation & Wireless Tracking:
Western Europe 2007-2012”.
This extensive study presents the current and future opportunities for portable tracking and
navigation products and services in Western Europe from 2007 to 2012. The report contains
a thorough analysis of three key product areas: personal navigation devices; personal
navigation software for handheld computing devices; and mobile phones & wireless connected
tracking devices & services (for vehicles & people). The substantial 250 page report focuses on
navigation and tracking relative to terrestrial (mainly road) mapping information and examines
a number of technology issues associated with providing location based services as well as
competing tracking technologies such as RFID. The report analyses integrated personal
navigation solutions (e.g. PNDs) as well as navigation solutions for portable computing devices,
Smartphones and mobile phones and third party traffic and travel information services
delivered by mobile phone. Furthermore, this methodical report also covers developments in
products for vehicle and person tracking applications whilst providing a practical five year
forecasting suite.
For more details on this report visit the website www.juniperresearch.com or phone
+44 (0)1256 830002

Juniper Research Limited
Juniper Research specialises in providing high quality analytical research reports and
consultancy services to the telecoms industry. We have particular expertise in the mobile,
wireless, broadband and IP-convergence sectors. Juniper is independent, unbiased, and able to
draw from experienced senior managers with proven track records.

About the Authors
Bruce Gibson is Senior Consultant for Juniper Research. He has worked in the IT and
telecom industries for over 20 years, providing consultancy services and information products
to telecom service operators, application developers/service providers and to industry
investors. Prior to joining Juniper Research, Bruce was Managing Director of Zetetic
Consulting, where he provided consultancy services to telecom operator and solution supplier
clients in Europe, the Middle East and Africa on IT-lead business process improvement and
market strategy.
Therese Cory is a computer and telecommunications consultant and author with a strong
analytical and research background. She has over twenty years’ experience in the field of
information technology and communications, including working as a software quality manager.
Therese now specialises in telecommunications markets and technologies, including telecoms
OSS, workflow, data mining, service monitoring/management, M2M communications.

Page 9

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