China's GPS Handset Market Growing Rapidly

The nascent market will explode as customers demand more location-based services and manufacturers improve GPS chipsets.
The market for GPS-packing mobile handsets is currently small in China, but it's expected to dramatically increase in the next four years, according to a new report from In-Stat.

The report, titled "China's Global Position on GPS Handsets: The Market is Booming," said GPS phones accounted for 0.6% of total mobile phone shipments in 2007. That figure will jump to 10% of total phones shipped in 2012.

China is the world's largest cell phone market, with China Mobile having over 300 million subscribers. While many of these subscribers utilize entry-level mobile phones, there is an increasing demand for handsets that offer location-based services like geo-tagging photos, turn-by-turn directions, and mobile social networking.

The report said cell phone manufacturers are taking notice of the predicted high growth rate for GPS in this market. In 2008, more handset manufacturers are producing GPS-enabled phones, and the number of models available will be at least three times the number available in 2007.

Currently, the report said, handset manufacturers are taking a cautious approach and releasing only a few high-end devices. One example is Motorola's recent announcement of two GPS-packing handsets in its Ming line of smartphones for the Chinese market.

But GPS chipsets will trickle down into less expensive cell phones as manufacturers seek to gain a larger share in a market that increasingly demands more features from its mobile phones.

Additionally, the cost and power consumption of GPS chipsets will have to be reduced as this technology penetrates less-expensive handsets. But, In-Stat said, many mobile phone chipset manufacturers have already begun to integrate GPS functionality into their cell phones' main chipsets in order to address these issues.

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Brian T. Horowitz, Contributing Reporter
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Sara Peters, Editor-in-Chief, InformationWeek / Network Computing