Apple Inc and China Unicom hold a joint presentation for the iPhone at a news conference in late 2009 in Beijing, highlighting the smartphone's GPS navigation function. [Photo / China Daily]

Navigational aids set to become major selling point, say analysts

BEIJING - Global Positioning System (GPS) software is set to become the next "must-have" function for cell phones, with a projected sales growth of more than 90 percent to reach 19 million units in China this year, said industry experts.

A few years ago, navigational features for cell phones were uncommon in China. But shipments for GPS-enabled cell phones increased from 199,000 units in 2006 to 10 million units in 2010.

"Last year, 473 GPS-capable cell phone models were released in the country, a 105 percent increase year-on-year. GPS functionality in cell phones will continue to expand rapidly this year," said Zhi Na, research manager at the Chinese IT analysis company ResearchInChina.

"This year, the industry will see dramatic developments in navigation software, application development and GPS cell phone research."

China has 800 million cell phone users, making the country the largest market globally for GPS-enabled handsets. Multinational cell phone manufacturers, such as Samsung, Nokia, Motorola and LG, all launched GPS phones in the domestic market last year. According to Zhi, Samsung launched 103 different models featuring GPS software in China last year, an increase from the 43 models available in 2009.

Nokia and Motorola are putting more focus into the industry this year, trying to compete with other manufacturers. "We have to meet our customers' needs," said Leon Xu, head of the Nokia Research Center in Beijing.

He pointed out that his company is researching different technologies for future GPS cell phones, including the possibility of producing sunglasses or watches with GPS technology.

To attract more users, Motorola plans to make all its newly launched cell phones GPS-enabled this year.

Increasing smartphone development is another reason for the growth of GPS cell phones. According to International Data Corporation (IDC), smartphone sales in the first three quarters of last year reached 200 million units globally, an increase of 67 percent year-on-year.

During the same period, smartphone sales in China hit 22.2 million units, with sales revenue totaling 50 billion yuan ($7.6 billion).

Smartphones only accounted for 20 percent of total cell phone sales last year, but according to China Mobile, the nation's biggest telecom carrier, sales are expected to reach 100 million units in 2011, a growth rate of 22 percent. China's 3G network will become a major driving force for GPS smartphone growth.

Related readings:  Parents watch over kids via GPS phones  Beijing uses GPS phones to safeguard pupils  China launches 7th orbiter for its GPS project  Yao Ming navigates deal with Beijing GPS maker

"Using the 3G network, users can easily update map information from the Internet. The development of 3D cell phone chips will also accelerate the industry," said Louis Pang, product director of AutoNavi Software Co Ltd, China's biggest navigational map provider.

"Last year, 341 GPS smartphone models were launched in the Chinese market, an increase of 160 percent year-on-year," said Zhi.

"Although compared to the GPS cell phone markets in the United States and Japan, the domestic market is still developing. But this year we will launch more colorful applications based on cell phone navigation," she said.

For instance, according to Xinhua News Agency, the Beijing Red Cross Foundation will offer about 20,000 GPS-enabled phones to primary and secondary school students to increase safety, as the watch-shaped phone will allow parents to locate their children at any time.