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Satellite Navigation Systems - UK - October 2009

This report looks at the aftermarket for personal navigational devices, otherwise known as sat-navs.

The sector has been one of the prodigious performers of the in-car technology market over the past five years, with rising volume sales and increasing penetration. However, in recent times, manufacturers have faced increased challenges as a result of more intense competition, forcing prices down and making it harder to generate sales value growth, despite rising volumes.

In response to an increasing focus on price, manufacturers have looked to added functionality as a way of encouraging existing users to trade up (such as widescreen, 3D displays) and bringing new users into the fold – for example, moves to integrate voice controls are seen as a way of making the technology more accessible.

Perhaps the greatest challenge manufacturers now face is the GPS-enabled smart phone. Handsets like the iPhone already have convergence down pat, whilst offering many of the leading sat-nav brands’ software (available as a downloadable application). Given that smartphone penetration is expected to increase rapidly, what should the likes of TomTom and Garmin now do?

Main issues

  • What impact has the recession had on the market and is there anything manufacturers can do to limit its negative effects?

  • What are the key distribution channels for sat-navs and how are these changing?

  • Can the duopoly of TomTom and Garmin be broken by the smaller manufacturers?

  • What potential does the market have for growth in the short term and longer term?

  • What factors drive consumer choice and how will these impact on first-time buyers?

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Table of contents

  1. Issues in the Market

      • Main issues
        • Definitions
          • Abbreviations
          • Future Opportunities

            • Customising sat-navs
              • The in-car concierge
                • Risk-free driving
                • Market in Brief

                  • Values sales fall while volumes keep rising
                    • Challenges aren’t all recession-bred
                      • Still a market offering ample growth potential
                        • Three key target groups
                          • More bells and whistles
                            • A market duopoly
                              • Car accessory retailers lead the retail market
                              • Internal Market Environment

                                • Key points
                                  • More cars mean a bigger target market
                                    • Figure 1: Trends in UK population and licensed cars and motor cycles, 2001-09
                                  • Consumers like new technology…
                                    • Figure 2: Statements regarding new technology, 2003-09
                                  • … but consumers are not necessary technophiles
                                    • Figure 3: Awareness of new technology currently available in the market place, June 2008-March 2009
                                  • Why size is everything
                                    • Figure 4: Important things looked for when buying portable technology, March 2009
                                  • The Swiss Army approach to technology
                                  • Broader Market Environment

                                    • Key points
                                      • The recession dents discretionary spending
                                        • Figure 5: GDP quarterly percentage change, 2004-09
                                        • Figure 6: Trends in personal disposable income and consumer expenditure, 2004-14
                                      • Economic crisis thwarts interest in technology and going out
                                        • Figure 7: Current economic downturn and purchasing of new technology, March 2009
                                      • Fuel and environmental issues
                                        • Figure 8: Fuel prices, 2001-08
                                      • Car sales
                                        • Figure 9: Trends in new and used car sales, 2004-08
                                      • Satellite investment
                                        • Age trends: A curate’s egg
                                          • Figure 10: Trends in the age structure of the UK population, by gender, 2004-14
                                        • Socio-economic trends are positive
                                          • Figure 11: Forecast adult population trends, by socio-economic group, 2004-14
                                      • Strengths and Weaknesses in the Market

                                          • Strengths
                                            • Weaknesses
                                            • Competitive Context

                                              • Key points
                                                • Fighting for the discretionary pound
                                                  • Figure 12: Sat-nav share of car maintenance and car enhancement sales*, 2004-09
                                                • Car manufacturers undermine standalone market…
                                                  • …and the sat-nav manufacturers help them out
                                                    • Mobile phones
                                                    • Who’s Innovating?

                                                      • Key points
                                                        • The iPhone: TomTom and Navigon go head to head…
                                                          • … while Garmin goes it alone (with ASUSTek)
                                                            • Sat-navs get connected
                                                              • Improving the existing experience
                                                                • Sat-navs for disabled drivers
                                                                • Market Size and Forecast

                                                                  • Key points
                                                                    • Volumes grow but value sales harder to generate
                                                                      • Figure 13: The UK sat-nav market, by value (£m) and units sold (million), 2004-14
                                                                    • Long-term falls in average prices forecast
                                                                      • Figure 14: Average price of sat-navs and the annual change in prices, 2004-14
                                                                    • Recession and market maturity lead to slower sales growth
                                                                      • Figure 15: The annual percentage change in market volume and value sales growth and sat-nav penetration, 2005-14
                                                                  • Market Share

                                                                    • Key points
                                                                      • TomTom leads the market
                                                                        • Figure 16: Satellite navigation: Manufacturer volume market share (aftermarket), 2008
                                                                    • Channels to Market

                                                                      • Key points
                                                                        • The structure of the distribution system
                                                                          • Figure 17: The structure of sat-nav retail distribution with examples, 2009
                                                                        • Car accessories retailers lead the market
                                                                          • Figure 18: Estimated sat-nav aftermarket sales, by outlet type, 2008
                                                                      • Companies and Products

                                                                          • Figure 19: Leading companies in the portable satellite navigation devices market and their brands, 2009
                                                                        • Major players
                                                                          • Garmin
                                                                            • Navigon
                                                                              • Navman
                                                                                • TomTom
                                                                                  • Others
                                                                                    • Binatone Electronics International Limited
                                                                                      • Clarion Co Ltd
                                                                                        • Harman Becker Automotive Systems
                                                                                          • Navevo Ltd
                                                                                            • Ndrive
                                                                                              • RAC/Aviva (rebadged)
                                                                                              • Brand Communication and Promotion

                                                                                                • Halfords takes the strain
                                                                                                  • Figure 20: Top 20 five advertisers in the satellite navigation sector (includes retailers and manufacturers), January 2006-May 2009
                                                                                                • Advertising comes in from the cold
                                                                                                  • Figure 21: Advertising spend, by media type, January 2006-May 2009
                                                                                              • Sat-nav Ownership

                                                                                                • Key points
                                                                                                  • Plug-and-go sat-navs dominate
                                                                                                    • Figure 22: Types of satellite navigation equipment owned, August 2009
                                                                                                  • Young men like their gadgets
                                                                                                    • Broadening the appeal of sat-navs
                                                                                                      • Figure 23: Multiple ownership of any satellite navigation equipment, by gender and age, August 2009
                                                                                                    • Those who can afford them tend to have them
                                                                                                      • The family’s taxi needs sat-nav
                                                                                                        • Figure 24: Ownership of satellite navigation equipment, by type and age of own children in household, August 2009
                                                                                                    • Expanding the Market

                                                                                                      • Key points
                                                                                                        • Potential market of over 30 million users
                                                                                                          • Figure 25: The potential market for sat-nav systems in GB, July 2009
                                                                                                        • Lower prices key to expanding the market in the short term
                                                                                                          • Figure 26: Percentage of adults considering a sat-nav purchase for the first time in the next 12 months, by age, working status and household income, August 2009
                                                                                                      • What Features do Buyers Look For?

                                                                                                        • Key points
                                                                                                          • Price and practicalities drive the market
                                                                                                            • Figure 27: The main features looked for when considering a new satellite navigation system, August 2009
                                                                                                          • For most, a limited range of features seals the deal
                                                                                                            • Figure 28: Number of main features looked for when considering a new satellite navigation system, August 2009
                                                                                                          • Importance of ease of use and price
                                                                                                            • Figure 29: Price and ease of use factors, by gender, age and income, August 2009
                                                                                                          • New and older, more experienced drivers look at routing features
                                                                                                            • Figure 30: Routing factors used to decide on a sat-nav purchase, by age, August 2009
                                                                                                          • Map details appeal to the young
                                                                                                            • Figure 31: Map-related factors used to decide on a sat-nav purchase, by age and working status, August 2009
                                                                                                          • Younger adults most interested in design
                                                                                                            • Figure 32: Look and feel-related factors used to decide on a sat-nav purchase, by age, August 2009
                                                                                                          • Value-added features also important to the young and men
                                                                                                            • Figure 33: Value-added related factors used to decide on a sat-nav purchase, by gender, age, working status and income, August 2009
                                                                                                        • Attitudes Towards Sat-navs

                                                                                                          • Key points
                                                                                                            • The balance between price and functionality
                                                                                                              • Figure 34: Attitudes towards sat-navs, August 2009
                                                                                                            • Improving routing features will cement the existing customer base
                                                                                                              • Figure 35: Attitudes towrds the trust placed in sat-navs, August 2009
                                                                                                            • Interest in one-off maps
                                                                                                              • Figure 36: The willingness to pay extra for new maps etc, August 2009
                                                                                                          • Buying Habits

                                                                                                            • Key points
                                                                                                              • Men click to buy and women walk to buy
                                                                                                                • Figure 37: Comparison between sat-nav owners that have bought a sat-nav online, versus in-store (offline), by gender, age and internet usage, August 2009
                                                                                                              • Halfords dominates in store, but Amazon plays an important role online
                                                                                                                • Figure 38: Where adults bought their most recent satellite navigation device, August 2009
                                                                                                              • Growth of sat-navs online
                                                                                                                • Sat-nav brands – cutting out the middleman?
                                                                                                                • Key Target Groups

                                                                                                                  • Key points
                                                                                                                    • Segmenting the customer base
                                                                                                                      • Four consumer groups
                                                                                                                        • Figure 39: Target groups, by ownership and buying patterns, August 2009
                                                                                                                      • Loyalists and budget buyers are the bulk of owners
                                                                                                                        • Figure 40: Target groups, by ownership and buying patterns, August 2009
                                                                                                                      • Wanting something for nothing
                                                                                                                        • Figure 41: Owners and non-owners, by target groups, August 2009
                                                                                                                      • Loyalists stick, while Budget Buyers twist
                                                                                                                        • Figure 42: Target groups, by attitudes to convenience, price, functionality and brand, August 2009
                                                                                                                      • Semi-detached are similar to Budget Buyers when purchasing
                                                                                                                        • Figure 43: Factors driving purchasing, by target groups, August 2009
                                                                                                                      • Older adults and women need to be attached to the market
                                                                                                                        • Figure 44: Target groups, by gender and age, August 2009
                                                                                                                      • Loyalists are more affluent, hence their willingness to buy top of the range
                                                                                                                        • Figure 45: Target groups, by income, August 2009
                                                                                                                      • Smaller brands need to attach the Semi-detached
                                                                                                                        • Figure 46: Brands of sat-nav owned, by target groups, August 2009
                                                                                                                      • Digital media and the broadsheets can target the loyalists
                                                                                                                        • Figure 47: Target groups, by daily newspaper readership, internet usage and TV viewing, August 2009
                                                                                                                    • Appendix – Channels to Market

                                                                                                                        • Figure 48: The number and price range of the sat-nav models stocked, by various retailers, August 2009
                                                                                                                    • Appendix – Sat-nav Ownership

                                                                                                                        • Figure 49: Types of satellite navigation equipment owned, by demographics, August 2009
                                                                                                                        • Figure 50: Circumstances that best describe people who do not own any satellite navigation equipment, by demographics, August 2009
                                                                                                                    • Appendix – What Features Do Buyers Look For?

                                                                                                                        • Figure 51: Most popular main features looked for when considering a new satellite navigation system, by demographics, August 2009
                                                                                                                        • Figure 52: Next most popular main features looked for when considering a new satellite navigation system, by demographics, August 2009
                                                                                                                        • Figure 53: Other main features looked for when considering a new satellite navigation system, by demographics, August 2009
                                                                                                                        • Figure 54: Least popular main features looked for when considering a new satellite navigation system, by demographics, August 2009
                                                                                                                    • Appendix – Attitudes Towards Sat-navs

                                                                                                                        • Figure 55: Most popular statements on satellite navigation devices, by demographics, August 2009
                                                                                                                        • Figure 56: Next most popular statements on satellite navigation devices, by demographics, August 2009
                                                                                                                        • Figure 57: Other statements on satellite navigation device, by demographics, August 2009
                                                                                                                    • Appendix – Buying Habits

                                                                                                                        • Figure 58: Comparison between sat-nav owners that have bought a sat-nav online, versus in-store (offline), by detailed demographics, August 2009
                                                                                                                        • Figure 59: Where bought most recent satellite navigation device (online/in store), by demographics, August 2009
                                                                                                                        • Figure 60: Where bought most recent satellite navigation device (in-store), by demographics, August 2009
                                                                                                                    • Appendix – Key Target Groups

                                                                                                                        • Figure 61: Target groups, by demographics, August 2009

                                                                                                                    Companies Covered

                                                                                                                    • Apple Computer UK Ltd
                                                                                                                    • Argos
                                                                                                                    • Audi United Kingdom
                                                                                                                    • Aviva Plc
                                                                                                                    • British Market Research Bureau (BMRB)
                                                                                                                    • British Sky Broadcasting Group plc (BSkyB)
                                                                                                                    • BT Group plc
                                                                                                                    • Cancer Research UK
                                                                                                                    • Clarion Co., Ltd.
                                                                                                                    • Co-operative Group
                                                                                                                    • Comet Group Ltd
                                                                                                                    • Currys
                                                                                                                    • Google UK
                                                                                                                    • Government Actuary's Department (GAD)
                                                                                                                    • Halfords Ltd
                                                                                                                    • Harman International Industries Incorporated
                                                                                                                    • HomeChoice
                                                                                                                    • J. Sainsbury
                                                                                                                    • John Lewis Plc (department store)
                                                                                                                    • Kenwood Electronics UK Ltd
                                                                                                                    • Marks & Spencer
                                                                                                                    • Mercedes-Benz UK
                                                                                                                    • Middlesbrough Football Club
                                                                                                                    • Navigon AG
                                                                                                                    • Navman Europe Ltd.
                                                                                                                    • Nokia Corporation (UK)
                                                                                                                    • Office for National Statistics
                                                                                                                    • Panasonic
                                                                                                                    • PC World (DSG UK Computing)
                                                                                                                    • Renault (UK) Ltd
                                                                                                                    • Robert Bosch Ltd
                                                                                                                    • Sony (UK) Ltd
                                                                                                                    • Suzuki GB PLC
                                                                                                                    • Tele Atlas
                                                                                                                    • Tesco Plc
                                                                                                                    • TomTom International B.V.
                                                                                                                    • Toyota (GB) PLC
                                                                                                                    • Twitter, Inc.
                                                                                                                    • Virgin Media Ltd
                                                                                                                    • Vodafone Group Plc (UK)
                                                                                                                    • YouTube, Inc.

                                                                                                                    Satellite Navigation Systems - UK - October 2009

                                                                                                                    £1,995.00 (Excl.Tax)