It may only overtake then in volume shipped initially, because with a billion cellphones selling globally each year, if just 10% of them start shipping with GPS, that will immediately pass in-car automotive, personal navigation devices, and consumer/recreational as the largest market, said Kanwar Chadha, founder and VP of marketing at San Jose, California-based SIRF.
Cellphones are still a relatively small percentage of the total GPS market and the bulk of phones offering satnav still do so via an external puck containing the GPS chipset. However, Motorola, Nokia, RIM and HTC, as well as a number of ODMs from the Far East, are now embedding the silicon in the phone itself, making the functionality easier to access and use.
2007 is the year GPS will go more mainstream, with both the chipset integrated into the phones and new services becoming available, said Chadha. He said Orange, T-Mobile, O2, and Cingular have all in the last four months announced location-based services as a differentiator to raise their ARPU. [But] Nextel [now part of Sprint] remains the only carrier to have launched a successful enterprise model for LBS to date, offering logistics management, field force automation, and tracking, he said.
Chadha also said GPS is more developed in terms of available location-based content in the CDMA world than in GSM. This is because the CDMA operators in the US opted to use GPS to fulfill their E911 requirement [for locating emergency callers] whereas the GSM operators went with triangulation, he said. And once CDMA phones were shipping with GPS, developing LBS was just a logical way for carriers to monetize the investment.
As a result of this, he said SIRF also sees Qualcomm as its biggest competition, though they’re focused on the CDMA market while we concentrate on GSM. Chadha also said SIRF recognizes the importance of LBS for recouping its investment in GPS handsets. We have an LBS platform with some 100 developers signed up to write apps to it, and the pre-integrated handsets will make it easier to bring the apps together on the phones, he said.
With the emerging mobile phone market in mind, SIRF now offers a common interface for LBS app developers to write to so that their services will work across all the leading mobile phone OSes. This is particularly important with embedded GPS going into enterprise, where you must support different OSes, said Chadha.
Regarding the competitive landscape, Chadha said SIRF has over 50% of the overall GPS market, though we’re bigger than that in portable devices and smaller in in-car automotive, because the design cycles are longer there.
Satnav as an activity dates back to 1993 when the USAF launched the last of 24 Navstar satellites to create the system. It has expanded from maritime to in-car automotive, then to PNDs so that all motorists could have one, and now even hikers, cyclists, and cross-country runners are carrying GPS devices. It is only in the last couple of years, however, that the technology has been integrated into phones, and perhaps for this reason, GPS silicon has so far not attracted the heavyweight semiconductor manufacturers.
Qualcomm is the obvious exception, and Texas Instruments has licensed technology from a smaller player but without making significant inroads into the market.
Privately held SIRF is a company with revenues around the $200m mark, and given the frequency with which its name crops up as integrated GPS takes off in cellphones (its SIRFstarIII chips enable GPS in the BlackBerry 8800 launched by RIM last week), its top line looks set to grow further. It will be interesting to see how long it is before it gains some more significant competition in GPS chips for the GSM world, which is a much larger market than CDMA.
