GPS navigation

BusinessIndia
Pierre Mario Fitter

You’re driving down a new road when you realise you’ve become hopelessly lost. You stop a passer-by and ask for directions. Looking confused, he mumbles a reply. Whatever his response was, it’s of no help, so you keep driving and driving. You wish you had the talking black corvette, Kit, from the Knight Rider TV show to guide you around!

Well, Kit’s here, or at least the part that tells you where you should be going, and it’s called Global Positioning System or GPS technology. The US first developed GPS technology in the 1970s for military use. In 1996, the then President Bill Clinton opened up the technology for public use. Today, in countries such as Japan, nearly two-thirds of new cars have GPS devices.




Here’s how GPS works. A constellation of 24 satellites sends down signals to Earth. A GPS device, say, in a car, must lock in to at least three such signals. This helps it calculate its exact position on the globe by measuring its distance from each satellite.

But learning only your geographic coordinates is useless if you’re lost — you still have to find your destination. So, GPS receivers combine geographic coordinates with road maps to navigate your way around. GPS navigation tells you where you are on a map and also shows you the road to your destination.


The popularity of GPS navigation has risen in recent years. In 2006, between 19 million and 30 million devices were sold worldwide depending on whose statistics you look at. In fact, the US-originated system is now so popular that Europe, India and China are planning their own satellite-based navigation systems. Russia already has one called Glonass.




Global GPS device sales took off in June 2003, when Medion, a German company, imported a personal navigation device (PND) for E499 from Taiwan. “Earlier, such devices sold for at least E800,” says Chris Jones, vice-president and principal analyst at Canalys, a high-tech industry analysis firm in London.

Medion’s breakthrough price helped sell 100,000 of its personal navigation devices in the first week alone. In 2004, TomTom, a global leader in PNDs, launched a similarly-priced device, sparking off a price war. “The competition drove down prices further,” says Jones. “Because the demand was so strong, companies were able to develop economies of scale.”

India is yet to see such growth. Until last year, Hyderabad-based SatNav Technologies was the only vendor of GPS devices. Since then, other companies have also entered the market with their own products. These include GPS-enabled mobile phones, personal digital assistants (PDAs) with built-in GPS receivers and other PNDs.



SatNav started in 1999 as part of Satyam Computer’s in-house technology entrepreneurship programme. “We used to work on maps and GPS navigation systems for Satyam clients,” says Amit Prasad, its founder and CEO.

SatNav went independent in 2003. Between August 2005 and March 2007, the company tried in vain to convince car makers to install its products in their vehicles. Only 1,200 units were sold.

Earlier this year, SatNav changed gears by selling its products online. 8,000 units have been bought in the past six months alone. Its product range now includes external GPS receivers (and software) that attach to smart phones and PDAs, as well as PNDs.

Another recent entrant is MapmyIndia. It started out as a summer project for 22-year-old Rohan Verma. His father, Rakesh Verma, launched CE Infosystems in 1994. CE Infosystems develop highly-detailed maps of India. In 2004, Rohan took his father’s extensive map data and made it available online for free.

“MapmyIndia.com got amazing user response,” says Rohan. “So I thought ‘let’s get serious’.” MapmyIndia’s online maps are now used by several organisations such as Yahoo! India, Yatra.com and even India’s Election Commission. This September, the company introduced a PND for about Rs 22,000. It also launched several new navigation products. These include new PNDs, free-to-download navigation software and maps for mobile phones and PDAs, and a Web-based SMS service for directions.

Bharti Airtel, which introduced GPS navigation on its Blackberry devices, uses MapmyIndia’s maps on the Blackberry 8800 model. “As more handsets come to India, this space will really open up,” says a Bharti Airtel spokesperson.

One company that promises to revolutionise the industry is Nokia. Two of its phones, the N95 and the E90, have built-in GPS capabilities . A third device is in the offing. “Navigation has the potential to surpass any other service, based on consumer need alone,” says Devinder Kishore, Nokia’s marketing director in India. Nokia’s recent moves show just that. According to media reports, the company will spend as much as $8 billion (Rs 32,000 crore) to buy NavTeq, the world’s largest digital mapping company. “If Nokia has its way, it will have GPS in most of its devices in two years,” says Canalys’s Jones.

Teething Pains

While the industry is largely optimistic, it does have some concerns in India. PND sellers such as SatNav Technologies and MapmyIndia.com face a 34 per cent import duty on their products. “PND prices need to come down for more people to buy them,” says Jones, who believes India will be a leading GPS device market. The cheapest device in India today is a Rs 12,000 GPS-enabled PDA from SatNav.

What could also complicate things is the government’s announcement that it has signed up to Europe’s satellite navigation programme — Galileo. India’s own satellite navigation programme, ‘Gagan’, will be reserved for the aviation industry. MapmyIndia’s Verma says these aren’t immediate worries as both Galileo and Gagan are at least 3-4 years away from launch. By then dual-compatibility devices should be available.

Until last year, the GPS device market was heavily dominated by PNDs. Phones such as Nokia’s N95 are changing that equation. Such GPS-enabled mobiles (2.1 million were sold last year), already form 11.3 per cent of the global market, while PNDs, with 15.5 million units sold last year, hold 81.8 per cent, according to Canalys. With countries such as India and China adding several million phone subscribers every month, market shares could easily tilt in favour of GPS-enabled mobiles in a few years.

“Competition is good,” says MapmyIndia’s Verma. “It forces you to continuously improve solutions.” His company expects to triple its revenues by end-2008. Prasad agrees. “Without competition, we may only sell 15,000 units next year; with it we might do 25,000,” he says.

Another growth opportunity in India may come from the car market. According to Canalys, around 10 per cent of European cars and up to 66 per cent of Japanese cars come with pre-installed navigation devices. For the moment, Prasad feels Indian car makers still don’t realise the potential of GPS navigation, but he remains hopeful.