ABI Research: East Asian Automotive Navigation Markets Charting Different Courses

October 23, 2006 // Published as a news service by IHS

Despite the different conditions and development patterns of automotive navigation markets in China, Japan, Taiwan and South Korea, a new study from ABI Research indicates all will show strong growth, driven by keen competition to support new functions.

Japan, with its government initiatives such as intelligent transport systems (ITS), leads the world in terms of navigation technology and mature market structure.

"By 2012, the Japanese in-vehicle navigation market will grow by an 8% CAGR (compound annual growth rate)," said ABI Research analyst Andy Bae. "The OEM (original equipment manufacturer) market will gradually dominate in Japan, with a higher growth rate than aftermarket products."

In South Korea, with its nationwide code division multiple access (CDMA) network and highly penetrated mobile devices, aftermarket operators (mobile operators) are growing faster than OEM market service operators. Analysts said the most distinctive trend in South Korea is convergence. Most vehicle electronics companies are unveiling convergence products, such as navigation plus digital multimedia broadcasting (DMB), portable music player (PMP) and MP3.

"DMBigation (navigation terminal supporting DMB) will be a key growth driver in South Korea," said Bae. "Greater participation by major CE (consumer electronics) vendors such as Samsung, and small and medium-sized vendors for MP3, will boost sales and competition. The growth rate in South Korea will be approximately 30% by 2012. GPS (global positioning system)-enabled handheld devices will outpace traditional in-dash navigation products with a 34% CAGR."

In China, ABI Research analyst Junmei He said that although OEM navigation systems led in 2005 shipments, handset-based navigation systems will take the lead in 2006 as result of navigation services launched by China Unicom, as well as the release of GPS-enabled smart handsets.

Analysts expect the mainland Chinese market to experience strong growth from 2006 to 2011. The Olympic Games, decreasing prices, improving digital map quality and deployment of the third generation (3G) network will combine to heat up the market. "From 2005 to 2011, handset-based navigation devices will achieve a growth rate of 139% CAGR, while that of personal navigation (PNAV) devices is expected to reach 102% and that of OEM navigation systems 48%," said He.

Taiwanese original design manufacturer (ODM) players will continue to play an important role in the handheld navigation market, analysts said, and the CAGR from 2005 to 2011 will be 29%.

Source: ABI Research.