Home » Business » Autotalk Special
Rivals vie for China's car navigation market
By Zhu Shenshen |
May 21, 2012, Monday
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Print Edition
Print Edition
WITH the voice navigation of AutoNavi on her iPhone 4S, Liu Jie drives from the China Pavilion in Pudong New Area to the Shanghai Library in Xuhui District, a place she has never visited that involves crossing a bridge and several districts in Shanghai.
"It's simple and useful," said Liu, who works in a finance firm and spent 100 yuan (US$15.87) for the navigation application that now costs 50 yuan after recent discount.
Lao Wei doesn't use smart phones for navigation. Instead, he relies on a built-in device in his newly bought Toyota. Wei, a journalist who often travels for business trips, said he needed something "professional and reliable."
The stories of Liu and Wei underscore rapid changes in the Chinese navigation market amid what might be called a dual-track trend.
Mobile devices, including phones and iPad, are eating into the market shares of portable navigation devices in the entry-level market. At the high end of the market, consumers still need vehicle-built-in services, which feature better integration with cars and professional navigation - often at a higher cost.
Millions of iPhone and Android phone users are able to find more than dozens of map apps with navigation functions, free or paid for in online stores. They cover both traditional map service providers like AutoNavi and Careland and also dot-com giants including Tencent (QQ), Baidu and Sohu.
"Our rivals are not map service providers but Internet giants now," said Yang Yongqi, AutoNavi's vice president.
The increased user base and huge market potential have attracted players to invest in the sector.
By the end of March, China's mobile map user base reached 170 million, more than triple the level of last year, according to Analysys International.
In the mobile navigation client end market, AutNavi took the No. 1 position with 38.9 percent, followed by Careland's 30.5 percent and Nokia's 10.7 percent, said Beijing-based Analysys.
Besides map and navigation services, the players have developed various functions to attract users. For example, both AutoNavi and Careland launched voice-control navigation services, just like the well-known Siri function on iPhone 4S.
Meanwhile, they are investing heavily to improve navigation route designs and establish their own mobile Internet communities.
At present, AutoNavi has about 58 million mobile users, and the number is expected to hit 100 million by the end of this year.
"A 100-million community with correct locations of users makes sense," said AutoNavi's Yang. "We can try something meaningful on it, like advertising."
On the other hand, portable navigation device firms that dominated the market for years have faced tough times.
In 2011, portable navigation device sales worldwide fell to 33 million units from 38 million a year earlier. By 2016, the figure is forecast to drop to 23 million, analysts said.
Diversifying business
Those players, including Garmin, are diversifying business into other sectors and expanding into emerging markets like China.
Though portable navigation device sales have dropped globally, demand in China remains vibrant. In the fourth quarter, sales of built-in portable navigation devices in China rose 12.5 percent from a year earlier to 298,000 units, according to Analysys.
Garmin, which provides one-third of automotive navigation devices globally, opened a new Chinese headquarters in Shanghai last month.
The company said it expects "double digit growth" in revenue in China this year, thanks to cooperation with carmakers and a booming market with a sales of 18 million new vehicles annually, according to Matthew Munn, Garmin's managing director of the Automotive Group.
Garmin has already collaborated with Dongfeng Nissan to provide built-in car navigation systems. It's also in talks with other Chinese car makers to provide navigation services, but Munn declined to reveal any names.
Compared smart phone-based navigation services, Garmin provides a better user experience, including user-friendly interface, a higher standard of security, high-accuracy maps and better integration with car systems.
On the other hand, map service provider AutoNavi has developed smart phone applications specifically designed for branded cars.
For example, AutoNavi is developing an application for some Ford models, which allows iPhone to connect to a vehicle's audio and air-conditioning systems. It costs a little more; maybe 150 yuan for each. But it seems to be welcomed by both car makers and consumers, said AutoNavi's Yang.
"It's simple and useful," said Liu, who works in a finance firm and spent 100 yuan (US$15.87) for the navigation application that now costs 50 yuan after recent discount.
Lao Wei doesn't use smart phones for navigation. Instead, he relies on a built-in device in his newly bought Toyota. Wei, a journalist who often travels for business trips, said he needed something "professional and reliable."
The stories of Liu and Wei underscore rapid changes in the Chinese navigation market amid what might be called a dual-track trend.
Mobile devices, including phones and iPad, are eating into the market shares of portable navigation devices in the entry-level market. At the high end of the market, consumers still need vehicle-built-in services, which feature better integration with cars and professional navigation - often at a higher cost.
Millions of iPhone and Android phone users are able to find more than dozens of map apps with navigation functions, free or paid for in online stores. They cover both traditional map service providers like AutoNavi and Careland and also dot-com giants including Tencent (QQ), Baidu and Sohu.
"Our rivals are not map service providers but Internet giants now," said Yang Yongqi, AutoNavi's vice president.
The increased user base and huge market potential have attracted players to invest in the sector.
By the end of March, China's mobile map user base reached 170 million, more than triple the level of last year, according to Analysys International.
In the mobile navigation client end market, AutNavi took the No. 1 position with 38.9 percent, followed by Careland's 30.5 percent and Nokia's 10.7 percent, said Beijing-based Analysys.
Besides map and navigation services, the players have developed various functions to attract users. For example, both AutoNavi and Careland launched voice-control navigation services, just like the well-known Siri function on iPhone 4S.
Meanwhile, they are investing heavily to improve navigation route designs and establish their own mobile Internet communities.
At present, AutoNavi has about 58 million mobile users, and the number is expected to hit 100 million by the end of this year.
"A 100-million community with correct locations of users makes sense," said AutoNavi's Yang. "We can try something meaningful on it, like advertising."
On the other hand, portable navigation device firms that dominated the market for years have faced tough times.
In 2011, portable navigation device sales worldwide fell to 33 million units from 38 million a year earlier. By 2016, the figure is forecast to drop to 23 million, analysts said.
Diversifying business
Those players, including Garmin, are diversifying business into other sectors and expanding into emerging markets like China.
Though portable navigation device sales have dropped globally, demand in China remains vibrant. In the fourth quarter, sales of built-in portable navigation devices in China rose 12.5 percent from a year earlier to 298,000 units, according to Analysys.
Garmin, which provides one-third of automotive navigation devices globally, opened a new Chinese headquarters in Shanghai last month.
The company said it expects "double digit growth" in revenue in China this year, thanks to cooperation with carmakers and a booming market with a sales of 18 million new vehicles annually, according to Matthew Munn, Garmin's managing director of the Automotive Group.
Garmin has already collaborated with Dongfeng Nissan to provide built-in car navigation systems. It's also in talks with other Chinese car makers to provide navigation services, but Munn declined to reveal any names.
Compared smart phone-based navigation services, Garmin provides a better user experience, including user-friendly interface, a higher standard of security, high-accuracy maps and better integration with car systems.
On the other hand, map service provider AutoNavi has developed smart phone applications specifically designed for branded cars.
For example, AutoNavi is developing an application for some Ford models, which allows iPhone to connect to a vehicle's audio and air-conditioning systems. It costs a little more; maybe 150 yuan for each. But it seems to be welcomed by both car makers and consumers, said AutoNavi's Yang.
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