ABI Research: Factory-Fitted Automotive Navigation Faces Growing Threats Across Several Fronts

OYSTER BAY, N.Y.--April 18, 2005--A new study from global market intelligence firm ABI Research has identified a host of new threats that are chipping away at automakers' attempts to increase navigation hardware sales. Depending on the region, automakers have been facing stiffer competition not only from traditional aftermarket navigation vendors, but from PDA/accessory vendors, wireless carriers, and other non-traditional automotive players.

Marking the beginning of a new trend, European aftermarket navigation hardware outsold factory-fitted systems for the first time last year. While ABI Research has warned automakers about this for some time, there are still ways for factory-fitted systems to compete.

The new study, "In-Vehicle Navigation Markets," suggests that automakers concentrate efforts on bundling ancillary capabilities and features as part of their navigation systems. These include adding large hard drive storage for digital media, enhanced HMIs (including voice-recognition, larger displays, etc.), telematics services such as E-Call/B-Call, and bundling the systems with more popular options packages, as opposed to the more costly ones.

"Cost pressures are greater in the navigation aftermarket which is partly why system prices are dropping faster there than on the OEM side," notes Frank Viquez, ABI Research Director of Automotive Research. "The fact that automakers must continually strive to add features to differentiate themselves keeps system costs high through that channel. It's a vicious cycle."

The study identifies several new technologies being introduced to enhance the navigation user's experience, including the transmission of real-time traffic data for dynamic navigation via FM subcarrier and satellite radio in North America. In Europe, Bluetooth links to cell phones enable traffic data feeds to portable navigation systems as do add-on RDS-TMC tuners. However these all have their problems.

The report scrutinizes growing threats from non-traditional channels such as mobile handsets, PDA-based and other portable navigation offerings. Critical business issues, market trends and technological developments are examined, along with market impact. The report also offers one of the most comprehensive global vendor assessments available.

Founded in 1990 and headquartered in New York, ABI Research maintains global operations supporting annual research programs, intelligence services and market reports in automotive, wireless, semiconductors, broadband, and energy. For information please visit www.abiresearch.com, or call 516-624-2500.