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Mapping GPS' path to handsets

Posted: 09 Jan 2008 ?? ?Print Version ?Bookmark and Share

Keywords:GPS capability? CDMA handset? baseband chip? PND?

While personal navigation devices (PNDs) and location-based services in cellphones make it easier for consumers to find their ways, the path to integrating GPS capability to handsets is not that clear.

Conventional wisdom would hold that the natural migration of global positioning technology into handsets at minimal cost means the integration of RF and digital functions into the same device, with a "no chip" GPS solution as the end game. The most notable proponent of that architectural approach is Qualcomm Inc., which for years has been integrating GPS processors into digital baseband chips for CDMA handsets.

But there is an alternate approach: providing standalone GPS silicon and intellectual property for integration, as has been done for Bluetooth and Wi-Fi functionality.

By far the biggest supplier of standalone GPS silicon and associated software is SiRF Technology, which has enjoyed significant market share for standalone PNDs and is seeing its chips increasingly designed into mobile phones. SiRF has been busy consolidating its lead through licensing and joint product development deals with other chipmakers, including NXP Semiconductors, Freescale Semiconductor and Intel.

Given the emerging market's potential volumes, it's not surprising that several startups are snapping at SiRF's heels. They include Swiss group Nemerix; GloNav, a spinout of the GPS activities of Ceva Inc.; u-Blox; u-Nav Microelectronics; and Bluetooth chip pioneer CSR, which about a year ago bought NordNav and Cambridge Positioning Systems. Two of these companies are poised to change hands: NXP is acquiring GloNav for at least $85 million, and Atheros is picking up u-Nav for about $54 million.

Even less surprisingly, given Qualcomm's participation in the sector, Broadcom Inc. moved to extend its own presence late last year through the acquisition of Global Locate, a long-term supplier of GPS and assisted-GPS devices and associated software, for about $150 million.

Winning formula
"There are many trade-offs, both in terms of technology and business cases," said Kanwar Chadha, SiRF's founder and vice president of marketing. "But a standalone approach clearly gives designers the most flexibility and makes the most sense when it comes to attach rates, which vary significantly in different countries and with different cellular technologies."

Attach rates for GPS are notoriously difficult to ascertain, but Chadha believes they could approach 100 percent in the United States for CDMA handsets and that they are also high in Japan and South Korea. By contrast, they are "low" in Europe and are even worse in China and India, he said.

SiRF's standalone architectural approach places less emphasis on support from the network operator, Chadha said. "And our integration approach is clearly the most flexible; thus we expect to win out," he said.

"Integrating the GPS functionality into the baseband, at almost no cost or board space [premium], is by far the most cost-effective [solution] and gives the OEMs the ultimate flexibility. But it goes beyond the business benefit," said Leslie Presutti, director of product management for GPS at Qualcomm. "We know how to optimize the functionality across all bands and platforms. It is also the quickest way for an ODM to add GPS capability without having to go through time-consuming and complex integration and optimization."

Growing market
Figures from iSuppli Corp. suggest GPS is on a steep ramp in mobile phones, driven mainly by the U.S. government's mandate for Emergency 911 capability and the rollout of sophisticated location-based services. The research group expects the market for GPS-equipped handsets to rise to 444 million units by 2011 from fewer than 110 million in 2006. That equates to 29.6 percent of all mobile phones shipped having GPS capability, up from 11 percent last year.

And chip market research firm Forward Concepts estimates that the market for GPS chips used in cellphones will increase at 40 percent CAGR between 2007 and 2011. A recent note from CIBC World Markets also suggests that sales of PNDs will grow from about 25 million units (worth $7.5 billion at wholesale prices) in 2007 to 67 million units ($14 billion) by 2010.

The architectural decision remains a tough call. Presutti and Chadha stress that no one approach is likely to prevail completely. But with attach rates already increasing in mobile phones and likely to climb significantly in wideband CDMA handsets, Qualcomm's model seems the better bet. That could leave companies like SiRF reliant on PNDs for the bulk of their revenue.

- John Walko
EE Times

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