ABI: Wholesale Price of GPS-Enabled Handsets to Fall Significantly by 2010
February 21, 2008 // Published as a news service by IHS
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Most handsets today with integrated global positioning system (GPS) are smartphones or high-end feature phones, with wholesale prices in the range of $250 to $500.
According to ABI Research, chipset manufacturers now have solutions in place that will permit the integration of GPS in handsets at lower costs, and provide significant improvements in terms of accuracy, time-to-first-fix and reception in indoor environments.
As a result, the wholesale average selling price (ASP) of GPS-enabled handsets will fall under $200 by 2010.
"Recent industry developments, such as the announcement by CSR [Cambridge Silicon Radio] and Samsung of lower costs for GPS modules for mobile devices, will ensure that prices for GPS-enabled handsets quickly come down," said ABI Research industry analyst Shailendra Pandey.
"Further, in coming years, it will become more cost-effective for manufacturers to have GPS in a large proportion of devices, rather than offering it in fewer handsets. This will enable lower ASPs for devices as well."
Until now, GPS chipset solutions for handsets have been costly ($5 to $10 per handset). Analysts said GPS chipset vendors, such as CSR and SiRF Technology, have developed solutions that will bring down the cost of integrating GPS in handsets to under $2. Other vendors, including Broadcom, have plans to integrate GPS with Bluetooth and to offer a single chip solution.
Current GPS-enabled handsets typically are code division multiple access (CDMA) devices, but these solutions will also allow the integration of GPS in global system for mobile communication (GSM) and wideband CDMA (W-CDMA) handsets at much lower costs.
Analysts said the market for GPS-enabled handsets will grow in the next five years, from around 140 million handsets in 2007 to more than 600 million handset shipments in 2012. In addition to major handset manufacturers, such as Nokia, Motorola, Research in Motion (RIM) and Samsung, smaller Asian original design manufacturers (ODMs) including High Tech Computer (HTC), Quanta and Inventec are introducing GPS-enabled devices.
Source: ABI Research.