As the tenderfoots are scoring against market giant SiRF, war in the GPS chip delivery chain is also boiling over and pouring prices falling ten to twenty per cent in the Q2 of 2007. The industry sources reveal that SiRF is now run into with price pressure following the leading PND purveyors TomTom & Garmin were reported to have employed GPS solutions from Global Locate and MediaTek correspondingly. Further pressure has also originated from developing dealings between Mitac International and GPS chip provider Centrality.
In spite of the pressure from an assortment of rivals, SiRF was not able to cut prices in the Q1 as contract quotes for the Q had before now been fixed to the ending of 2006. As said by procurement staff with PND manufacturers, SiRF has now trimmed down prices, however the prices are even now considerably higher than the US$5 level that the market looks forward to. The price cut has not succeeded in reining in war from others, with a Taiwan-based PND manufacturer purportedly having moved 50 per cent of its orders to MediaTek. Sources with GPS vendors guesstimate that the PND industry’s main target in 2007 is to increase the market by endorsing entry-level and mid-range models, and any solutions that could decrease costs will draw attention from PND manufacturers.
The sources also predict that, as second-tier players are getting ready to the growth of GPS solutions, that costs will come down to 10-20 per cent in the Q2 of 2007. Prices may possibly jump down further to US$5 in the Q3; drop some 50 per cent likened to the average selling prices (ASPs) of US$9-11 for 2006.
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