I read an interesting article on Gigaom which says the GPS market is slowing down as the main producer of GPS chips is expierencing a slowdown. The reality is that people are looking for an all in one device. Play music , find me a place (GPS) make a call , surf the web etc…

Mobile producers such as Nokia understand this are constantly working to give the fickle consumer what they want.

So it makes sense that at some point Garmin and its likes will be just a memory of what things used to be like.

Here is a copy of the article from Gigaom.com

SiRF Technology (SIRF), a San Jose, Calif.-based maker of GPS chips, this morning said it was cutting jobs and trying to restructure its business due to softening consumer demand. Already the worst performing tech stock for the year, shares of SiRF nosedived in early trading this morning.

“SiRF experienced greater-than-expected softness in product demand from its customers, especially in the PND, or Personal Navigation Devices market,” the company said in a press release.

SiRF is the canary in the GPS coal mine. In other words, the GPS device market has hit the skids and we should expect more bad news, and more dominoes to tumble. Why? Look at SiRF’s customers: Tom Tom, Magellan, NAVIGON, Sony and European white-label GPS maker, Binatone. If the macroeconomic trends are putting a damper on SiRF and its chip-buying posse, it isn’t hard to extrapolate and see trouble for Garmin as well.

Looking further out onto the horizon, I think the standalone GPS device market is going to get cannibalized by mobile phones, which are getting increasingly sophisticated when it comes to personal navigation functionality. GPS devices were among the hottest-selling consumer items this past holiday season, with sales up 214 percent and revenues up 488 percent, respectively, year-over-year. 

Lets see if the GPS companies can overcome the mobile producers and come up with something that Nokia cannot add to a mobile device.

Just a thought why does’nt Garmin and Tomtom add mobile phone features to its devices.

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