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Firms Fight For Slice Of Booming Navigation Market

Posted by iMark - 2006-03-17

If proof were needed that the market for navigation devices is booming, a glance at the number and size of booths devoted to them at the CeBIT technology fair would dispel all doubts.

Much of Hall 11 at the world's biggest tech show, in the German city of Hanover, is given over to navigation and related products including both built-in and portable car systems and navigation-enabled mobile phones.

Dozens of companies want a piece of the business that within a few years grew from a niche market to an estimated 6 million to 9 million units this year in Europe alone.

The number of exhibitors at CeBIT has more than doubled from last year to 180, and the floor space has almost tripled to 5,600 square metres (60,280 sq ft).

Apart from brand names such as European market leader TomTom or U.S. number one Garmin , various big and small players are vying for attention.

On display is a phone with a GPS (global positioning system) module from Swiss firm ImCoSys that runs on the alternative operating system Linux as well as a car navigation device from klickTel that includes the German white pages, with 30 million entries. Several firms target the business market with navigation-enabled fleet management systems. Others offer GPS phones for high-risk patients to call an ambulance at the push of a button and transmit the current location.

While everyone agrees that the market will continue its rapid growth, industry executives do not expect every company with a big booth at CeBIT this year to be back.

BARRIERS

"I don't think everybody who is in the market today will be around," Marina Wyatt, chief financial officer of TomTom, told Reuters at CeBIT.

"Retailers are only going to carry a small number of manufacturers and devices ... as you get bigger -- and we are getting bigger -- the barriers become harder for people to step in. We've got very competitive shelf space and a big brand," she said.

One firm that is determined to make its mark is Germany's Jentro. It offers navigation software that not only runs on powerful smart phones but also on simple mobile phones because the route information comes from a central server and is not stored on the phone itself.

This approach, also used by players such as Sweden's Wayfinder and VDO Dayton, means Jentro and the mobile phone carriers that transport the data earn revenue every time a user requests directions.

Jentro says it has signed up some 250,000 users and could grow to 1 million by the end of the year. Chief Executive Erno Hempel said the firm has been profitable since October and had sales of more than 5 million euros last year, a more than 10-fold increase from 2004.

The big players are watching the server-based navigation model with interest.

"The cellular business is huge," Jon Cassat, director of marketing communication at Garmin, told Reuters.

"As much growth as we would like to see continue with GPS satellite navigation ... the volume that is represented by the cellular side represents a huge upside."



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