GPS navigates on to mass market, consumer wish lists
Once an expensive toy for travelers, the GPS navigation system has entered the mainstream this year, with sales more than tripling over 2006. And with prices falling to the $200 range, and mass retailers carrying a larger selection, GPS systems are expected to be a hot gift item for the holidays and into 2008.
Market leaders like Garmin are releasing new models this fall with new features, lower prices and different styles. Garmin debuted a pink GPS system in an effort to expand beyond its core, male consumer and target female shoppers. The Nuvi 200 comes in two shades of pink and features turn-by-turn voice directions, a color touch screen and built-in databases of hotels, restaurants, shops and gas stations.
The company also is teaming up with Palm this month for the debut of the Palm GPS Navigator featuring Garmin Mobile software. The new system that’s compatible with Palm cell phones is expected to sell for $250 and comes with voice directions, weather forecasts and traffic reports that include updates on road conditions and construction.
With new suppliers like Jensen, Sanyo and Samsung jumping on board and demand growing, GPS systems have gone from a novelty item to a “must have” gift in the space of 12 months. According to The NPD Group, they took off at the start of the summer travel season this year, with sales of 229,117 units in May, compared to just 59,534 in May of 2006, and 359,950 units in June, compared to 100,529 the same month in 2006.
That early summer spike has driven year-to-date sales (through Aug. 31) to 1.728 million units, compared to 468,404 units during the same period last year. The top sellers include the Garmin Street-Pilot C330, priced around $300, and the Magellan Maestro 3100, priced at $249.
GPS systems are still a long way from being a staple item in cars, but that may not be the case for long. Retailers like Wal-Mart and Target now carry several different models in stores—Wal-Mart stocks them in their very own glassed-in case—and that exposure is giving GPS systems a higher profile across a broad range of consumers.
“Consumer awareness has really grown and prices have come down,” said Andy Hargreaves, a consumer electronics analyst with Pacific Crest Securities in Portland, Ore. “So, there’s a really strong demand now for that type of functionality, and that’s why you’re seeing a triple-digit increase in sales.”
The technology is becoming so popular that many cell phone suppliers are equipping new smartphones with basic GPS functions. Samsung said three of its smartphones due out in early 2008 are going to include GPS navigation systems with voice direction as a standard feature.