China flying high on GPS

Handset manufacturers and wireless carriers have quickly warmed up to the idea of global positioning system services as a means to offset declining ARPU in China, according to a new report from iSuppli Corp. Handset manufacturers are increasingly developing devices that support GPS while Chinese operators have deployed navigation services for their subscribers.
iSuppli predicts GPS handset shipments will jump to 16.5 million units in 2011, marking a tenfold increase from the 1.4 million shipped this year. China Mobile and China Unicom both launched navigation services this year with a typical monthly fee for mobile navigation services of $2.50 per subscriber with 5 megabytes of data included. Three map suppliers-Lingtu Software Technology Co. Ltd., Careland Information System Co. Ltd. and Guantu Information Technology Co. Ltd.-currently dominate the market, according to iSuppli.
“The greatest barrier to the mass-market adoption of GPS-equipped handsets is their high selling prices,” said Kevin Wang, senior analyst for China research at iSuppli. “By the end of 2006, GPS handsets were mainly high-end smartphones costing more than $700.”
However, the firm found that GPS-equipped handsets are coming to market in much greater quantity and at lower prices. iSuppli predicts navigation services to soon become a killer application for the mobile industry in China.