Presently, most handsets with integrated GPS are smartphones or high-end feature phones, with wholesale prices in the range of $250 to $500. However, ABI Research says that 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 ASP (Average Selling Price) of GPS-enabled handsets will fall under $200 by 2010.

“Recent industry developments, such as the announcement by CSR and Samsung of lower costs for GPS modules for mobile devices, will ensure that prices for GPS-enabled handsets quickly come down,” says 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). However, GPS chipset vendors such as CSR and SiRF 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 CDMA devices, but these solutions will also allow the integration of GPS in GSM and WCDMA handsets at much lower costs.

ABI Research expects the market for GPS-enabled handsets to grow strongly 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, RIM, and Samsung, smaller Asian ODMs including HTC, Quanta, and Inventec are introducing GPS-enabled devices.

About this study

ABI Research’s recent report, GPS-Enabled Mobile Devices, examines the market landscape and future potential for GPS-enabled mobile phones. It discusses critical business and marketing issues, as well as market opportunities and challenges for handset vendors, mobile operators, semiconductor vendors, and other industry players who address the GPS-enabled handset market.

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