Columbus Geographic Systems (GIS) Ltd. ("Columbus") issued a stockholder update on the growing market for navigation solutions. These market developments represent significant opportunities for Columbus to grow the company and become a leading industry player.
The market for navigation solutions is growing rapidly and attracting strong interest from a wide range of players. A recent example of this is the announcement by the Finnish mobile phone giant Nokia to acquire U.S. digital mapmaker Navteq for $8.1 billion.
The personal navigation business is booming. Unit sales of personal navigation devices have reportedly increased from 2.5 million in the U.S. last year to 7.5 million for this year. There is also strong market opportunity in GPS-equipped phones. Only 11% of the one billion cell phones sold last year had GPS chips in them. However, by 2011, chips are expected to be present in more than a third of all new cell phones, creating a $3 billion-a-year business in cellular navigation in the U.S. and Europe, according to Sanford C. Bernstein research.
Another area of strong growth is the market for in-car navigation systems. According to Frost & Sullivan Research Analysts Praveen Chandrasekhar and Franck Leveque, "Navigation systems have become increasingly affordable and are now the target of consumer electronics participants who view the automotive market as an untapped opportunity. Convenience, efficiency and the need to avoid using paper maps seem to be driving interest in navigation systems."
It is estimated that in 2006 only about one-in-nine new cars arrived at the dealership with in-dash navigation systems. At the beginning of 2007, only an estimated 7% of the addressable North American and Western European markets had been penetrated. This represents a very large market potential still to be developed.