12/12/07 - Cellphones Won't Soon Replace Today's GPS Devices

More cellphones can now lead us precisely to our destination, thanks to cheap chips that talk to navigation satellites. So will we dump all the navigation gear that is a hot-selling item this holiday season? Not soon, analysts agree.

There's no beating the bigger screens on stand-alone GPS, says Caroline Chow, a market analyst at Canalys. The bigger screens on what the industry calls 'personal navigation devices' make directions easier to follow and easier to access than on a cell's small display. And navigation is simpler on PNDs because that's their primary purpose. The benefits outweigh the costs, especially with today's prices crashing below $100 for starter PND models. 'I'm amazed at how low they're selling these things,' she says.

Device makers like Garmin, TomTom, and Mio have done a great job at making a complicated function—navigation—simple to use, says Richard Robinson, a market analyst at iSuppli. 'PNDs currently enjoy very high user-satisfaction ratings,' he wrote in a recent report. The device makers need to guard that advantage over cellphones and not add too many extra functions, such as viewing digital pics and videos.

Cell companies also collect a monthly fee for navigation and sometimes charge for airtime, Robinson wrote. Those fees confuse and discourage consumers, who like the simplicity of the one-time charge for a dedicated navigation device. In short, while GPS-enabled phones pose a threat, all signs point to a growing market for PNDs.