As PND sales slumped, navigation specialist TomTom's revenue dropped 17 pc in 2012 (Photo: TomTom)
Sales of personal navigation devices (PNDs) are set to decline sharply in coming years as consumers opt for alternatives, according to a report by Berg Insight.
The analysts predicted that PND sales will fall to 17 million units by 2017, down from 28 million last year and 33 million in 2011.
They provided several reasons for the downward trend, including strong competition from navigation apps on smartphones, a high installed based of PNDs and retailers' preference for marketing higher margin consumer electronics products.
Berg also predicted that, in the automotive realm, PNDs will face stronger competition from lower cost embedded systems.
Underlining the growth of smartphone apps, Berg said the number of mobile subscribers using a navigation app at least once a month soared to 150 million worldwide in 2012 from 105 million in 2011. Many of these subscribers use free apps on their smartphones, Berg said.
The downward trend in PND sales has forced major navigation specialists such as Netherlands-based TomTom to commit more resources to the development of other products. TomTom's sales fell 17 pc in 2012 and the company said in its 2012 annual report that it expected PND sales in core markets to drop by 15-20 pc in volume this year.
As a result of its focus on other business areas, TomTom saidÂ it had managed to reduce the PND share of overall revenue to less than 50 pc last year.