One Billion GPS Chip Sets by 2011 - SiRFs UP?

In a report published today ABI Research forecasts one billion GPS chipsets will be shipped annually in 2013. According to ABI Research, in 2007, SiRF held a commanding 70% share of the GPS IC market. "It achieved this by getting in early and aggressively targeting the market for consumer devices: while professional GPS has been around for some time, it is a much smaller and slower-growing market segment", explains the report.

Industry analyst Jamie Moss comments, "Three factors will intersect to shape the future of the GPS IC market. The average price of the chipset will fall to $3.50 or below by the end of 2008, permitting a true mass market adoption. This past fall ASP is driven by manufacturers' goal of producing receivers that can be included in lower-margin devices such as mobile phones: handset-based GPS will be critical to strong market penetration. The benefits will filter down to more traditional GPS uses such as in-car navigation. Meanwhile, we're seeing growing numbers of acquisitions: large chip manufacturers buying up specialist fabless GPS IC vendors in order to include their technologies in solutions that combine GPS with varied wireless RF product offerings, especially Bluetooth."

ABI's interest in GPS fabricators suggests manufacturers of personal navigation devices are facing continued stiff competition and will likely seek to stand out in the market by adding speech technology, multimedia capabilities, 3D map content and other features to their products. ABI Research predicts worldwide sales of these convergence devices will surpass more than 100 million units by 2011. Examples of such acquisitions in 2007 include Global Locate, acquired by Broadcom (June); GloNav by NXP (December); and u-Nav by Atheros (December). Additionally SiRF acquired Centrality to integrate System on Chip (SoC) solutions in its product range and u-blox went public on the Swiss stock exchange.

"In terms of absolute performance," says Moss, "there's not a lot to choose between rival manufacturers. To win important contracts the chipset must be as inexpensive as possible and as easy as possible for device manufacturers to integrate with Bluetooth, Wi-Fi, FM radio and cellular solutions. As it was with Bluetooth, there is no great proactive consumer demand for GPS in mobile phones today, but once it's there, people will use it and expect it."

The dominance of Mobile phones that increasingly offer GPS as a standard feature has driven SiRF to play the commodity game as new entrants erode their legacy domination of the GPS chip supply. They took a significant hit in their stock due to this increase competition. But they have an answer that could shift the opportunity back their way in a few quarters.

In February Sirf announced a new GPS chip design, the SiRFprima platform. SiRFprima is a technical jump in that it combines an industry leading GPS/Galileo location engine, powerful application processor, rich audio and video recording and playback capabilities, high-resolution 3D graphics and a host of peripheral interfaces - all tuned to operate concurrently. Playing to the smartphone manufacturers, it supports both WinCE and Linux operating system environments which suggests SiRF intends to play with Google's Android handset.

The SiRFprima platform includes an ultra-high-speed, multifunction processor comprised of an advanced ARM11 core, a high-performance location engine that supports both GPS and Galileo satellite systems and an on-chip DSP. It also includes hardware-accelerated 3D graphics and multimedia encoding and decoding engines based on the gaming-grade PowerVR MBX 3D graphics accelerator core, vertex geometry processor and PowerVR MVED1 video encode/decode accelerator from Imagination Technologies. The SiRFprima multifunction processor delivers SiRF's renowned, industry leading, GPS-enabled location performance, featuring 64 channels with -161 dBm sensitivity. The hardware scalable location engine, with more than 1,000,000 correlators, is among the first capable of working with both GPS and Galileo signals simultaneously. Additionally, the SiRFprima processor has been specifically designed to support SiRF's proprietary GPS technologies, providing, for example, a dedicated accelerator for the SiRFInstantFixII(tm) technology.