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Technology Stocks : NVT - Source of GPS Software, Data, and Maps
NVT 19.33-1.5%Oct 8 2:32 PM EST

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From: tech1014/9/2008 11:47:03 PM
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businessweek.com

It doesn't help that handset makers can offer big subsidies, adding to price pressure. "Nokia's ultimate goal is to make navigation in mobile phones as ubiquitous as cameras," Wood says. "The challenge for TomTom is they sell into the standard retail channel where subsidies are not available."

Nokia plans to include navigation features in roughly half of its phones in the next two to four years, Wood says. And while TomTom will sell 14 million to 15 million devices this year, Nokia will sell some 400 million phones this year, roughly half of which will be navigation-ready.

Consumers bought more than 22 million PNDs in 2007 and are expected to buy more than 32 million this year, says Richard Robinson, an analyst at market research firm iSuppli. But the average selling price on a PND in 2007 was $249, less than half the 2004 average of $505. Margins are slipping, too. "These companies got used to making profit margins of 45% to 60% during the 2004 to 2005 time frame," Robinson says. "Now they're having to contend with margins that are closer to 18% to 20%. That's not ringing well with the financial guys. The problem is you can only make so much on each unit you sell."
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